Exhibit 10.11
EMAGEON UV, INC.
SECOND AMENDMENT AND JOINDER TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS SECOND AMENDMENT AND JOINDER ("Second Amendment") to the Amended and
Restated Registration Rights Agreement of Emageon UV, Inc., dated October 2,
2001, as amended by the First Amendment and Joinder to the Amended and Restated
Registration Rights Agreement, dated May 30, 2003 (collectively, the
"Agreement"), is made as of June 25, 2003, by and among EMAGEON UV, INC., a
Delaware corporation (the "Company"), those holders of the Company's Series A
Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock that are parties to the Agreement,
Xxxxxxx X. Xxxx, Xx., Xxxx X. York, and the undersigned parties holding all of
the Company's outstanding shares of Series E Preferred Stock. Capitalized terms
used herein but not otherwise defined shall have the meanings given to such
terms in the Agreement.
WITNESSETH:
WHEREAS, the Series A Holders, Series B Holders, Series B-1 Holders,
Series C Holders, Series D Holders, Xxxx and York (collectively, the "Existing
Parties") are parties to the Agreement;
WHEREAS, the Company and the Series E Holders have entered into a Series E
Preferred Stock Purchase Agreement of even date herewith pursuant to which the
Company desires to sell to the Series E Holders and the Series E Holders desire
to purchase from the Company shares of the Company's Series E Preferred Stock;
WHEREAS, a condition to the Series E Holders' obligations under the Series
E Preferred Stock Purchase Agreement is that the Company, the Existing Parties
and the Series E Holders become parties to the Agreement in order to provide the
Series E Holders with certain rights to register shares of the Company's Common
Stock issuable upon conversion of the Series E Preferred Stock held by the
Series E Holders;
WHEREAS, Section 12 of the Agreement provides that the Company shall not
grant demand registration rights to any party or any incidental registration
rights that are superior to or pari passu with the incidental registration
rights of the Investor Holders without the written consent of Investor Holders
representing in the aggregate more than 50% of the Registrable Shares then held
by such Investor Holders;
WHEREAS, pursuant to Section 13 of the Agreement, any term of the
Agreement may be amended with the written consent of the Company and Holders
representing in the aggregate more than 50% of the Registrable Shares, and any
amendment effected in accordance with Section 13 of the Agreement shall be
binding upon each Holder, each future Holder and the Company;
WHEREAS, the Company desires to amend the Agreement;
WHEREAS, (i) the undersigned Investor Holders, which hold more than 50% of
the Registrable Shares held by Investor Holders, and (ii) the undersigned
Existing Parties, which hold more than 50% of the Registrable Shares, desire to
amend the Agreement to extend to the holders of the Company's Series E Preferred
Stock the rights and obligations of a Holder under the Agreement; and
WHEREAS, the undersigned holders of all of the outstanding shares of the
Company's Series E Preferred Stock desire to become parties to the Agreement, as
amended by this Second Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual terms and
conditions set forth herein, it is hereby agreed by and among the Company, the
Series A Holders, Series B Holders, Series B-1 Holders, Series C Holders, Series
D Holders, Xxxx and York that the Agreement is hereby amended in accordance with
this Second Amendment, and the undersigned holders of all of the outstanding
shares of the Company's Series E Preferred Stock shall become parties to the
Agreement, as amended by this Second Amendment:
1. AMENDMENTS.
(a) The initial paragraph of the Agreement is hereby deleted in its
entirety and replaced with the following:
"This Amended and Restated Registration Rights Agreement (the "AGREEMENT")
is made and entered into as of October 2, 2001, by and among Emageon UV,
Inc., a Delaware corporation (the "COMPANY"), those holders of the Series
A Preferred Stock of the Company listed on Schedule 1 attached hereto and
made a part hereof (each, a "SERIES A HOLDER" and collectively, the
"SERIES A HOLDERS"), those holders of the Series B Preferred Stock of the
Company listed on Schedule 2 attached hereto and made a part hereof (each,
a "SERIES B HOLDER" and collectively the "SERIES B HOLDERS"), those
holders of the Series B-1 Preferred Stock of the Company listed on
Schedule 3 attached hereto and made a part hereof (each, a "SERIES B-1
HOLDER" and collectively, the "SERIES B-1 HOLDERS"), those holders of the
Series C Preferred Stock of the Company listed on Schedule 4 attached
hereto and made a part hereof (each a "SERIES C HOLDER" and collectively
the "SERIES C HOLDERS"), those holders of the Series D Preferred Stock of
the Company listed on Schedule 5 attached hereto and made a part hereof
(each a "SERIES D HOLDER" and collectively the "SERIES D HOLDERS"), those
holders of the Series E Preferred Stock of the Company listed on Schedule
6 attached hereto and made a part hereof (each a "SERIES E HOLDER" and
collectively the "SERIES E HOLDERS"), Xxxxxxx X. Xxxx, Xx. ("XXXX") and
Xxxx X. York ("YORK")
(each of Xxxx and York, a "FOUNDER," and collectively, the "FOUNDERS")."
(b) The definition of Preferred Stock in Section 1 of the Agreement is
hereby deleted in its entirety and replaced with the following:
"`Preferred Stock'" means the Series A Preferred Stock of the Company,
$0.001 par value per share, the Series B Preferred Stock of the Company,
$0.001 par value per share, the Series B-1 Preferred Stock of the Company,
$.001 par value per share, the Series C Preferred Stock of the Company,
$0.001 par value per share, the Series D Preferred Stock of the Company,
$0.001 par value per share, and the Series E Preferred Stock of the
Company, $0.001 par value per share."
(c) The last sentence of Section 13 is hereby deleted in its entirety
and replaced with the following:
"Notwithstanding anything to the contrary in this Section 13, the Company
shall be entitled to add additional purchasers of Series E Preferred Stock
pursuant to Section 2.1 of the Series E Preferred Stock Purchase
Agreement, dated as of June 25, 2003, as parties to this Agreement as and
in the manner set forth in such Section 2.1, and each such additional
purchaser shall thereafter be deemed to be an Investor Holder for all
purposes hereunder."
(d) A new Schedule 6 is hereby added to the Agreement in the form
attached as EXHIBIT A hereto.
2. JOINDER. Each undersigned holder of shares of the Company's Series E
Preferred Stock hereby agrees that upon execution of this Second Amendment by
such person or entity, such person or entity shall become a party to the
Agreement, as amended by this Second Amendment, and shall be fully bound by, and
subject to, all of the covenants, terms and conditions of the Agreement, as
amended by this Second Amendment, as though such person or entity were an
original party thereto and shall be deemed a Holder for all purposes thereof.
3. GENERAL PROVISIONS.
(a) NO OTHER AMENDMENTS. Except for the amendments contained in SECTION
1 of this Second Amendment, the Agreement shall remain in full force and effect.
(b) AUTHORIZATION. Each Holder (which term shall include the undersigned
holders of shares of the Company's Series E Preferred Stock) hereby represents
and warrants to the Company and to each other that (i) such Holder has full
power and authority to execute, to deliver and to perform such Holder's
obligations under this Second Amendment; and (ii) the execution and delivery of
this Second Amendment has
been duly and validly authorized, and all necessary action has been taken to
make this Second Amendment a valid and binding obligation of such Holder,
enforceable in accordance with its terms, except that the enforcement thereof
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and to general principles of equity (regardless of whether such enforcement is
considered a proceeding in equity or at law).
(c) GOVERNING LAW. This Second Amendment shall be governed by and
construed under the laws of the State of Delaware, as applied to agreements
among Delaware residents made and to be performed entirely within the State of
Delaware, and without regard to the conflicts of law principles as may otherwise
be applicable.
(d) BINDING ON SUCCESSORS. This Second Amendment shall bind and inure to
the benefit of the parties hereto, their respective heirs, executors,
administrators, successors and permitted assigns.
(e) COUNTERPARTS AND SIGNATURE BY FACSIMILE. This Second Amendment may
be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. The facsimile signature of any party to this Second Amendment for
purposes of execution or otherwise is to be considered as an original signature,
and the document transmitted is to be considered to have the same binding effect
as an original signature on an original document. At the request of any party,
any facsimile or telecopy document is to be re-executed in original form by the
parties who executed the facsimile or telecopy document. No party may raise the
use of a facsimile machine or telecopier or the fact that any signature was
transmitted through the use of a facsimile or telecopier machine as a defense to
the enforcement of this Second Amendment or any notice required thereof.
[THE FOLLOWING PAGE IS THE SIGNATURE PAGE]
EXHIBIT A
SCHEDULE 6
SERIES E HOLDERS
ASCENSION HEALTH
CB HEALTHCARE FUND II, L.P.
CB-AH PARALLEL FUND II, L.P.
SOUTHEASTERN TECHNOLOGY FUND, L.P.
STF PARTNERS II, L.P.
STF PARTNERS QP II, L.P.
STF INSTITUTIONAL PARTNERS II, L.P.
THE PERMANENTE FEDERATION LLC
XXXXXX FOUNDATION HOSPITALS
HARBINGER/AURORA VENTURE FUND, L.L.C.
HARBINGER/AURORA QP VENTURE FUND, L.L.C.
XXXX X. XXXXXXXX
R. XXXX XXXXX
XXX XXXXXXX
XXXX X. XXXXXXXX
XXXXXXX XXXXX & XXXXXX XXXXXXXX
XXXXXX XXXXXX
XXXXXX XXXXXXXXX
GFP ULTRAVISUAL LLC
XXXXXXX X. XXXXXX
XXXX XXXXXXX
XXXXX CASE
XXXXX REVOCABLE TRUST
XXXXXX XXXXX, M.D.
XXXXX XXXX
XXXXX XXXXXXXX
XXXXXXX X. XXXXX
XXXXXXX X. XXXXXX CLU LTD.
XXXX X. XXXXXXX
XXXX XXXXXXXX
XXXXXXX X. XXXXX
XXXXX X. XXXXXXX
XXXXXX X. XXXXXXXX
XXXXXX AND XXXX XXXXXXX FOUNDATION
XXXXX X. XXXXX
XXXXX X. XXXXXXXXXXX AND XXXXXX X. XXXXXXXXXXX FAMILY TRUST
XXXXXXX X. XXXXXX
RICHGOOD CORPORATION
GREYSTONE CAPITAL PARTNERS I, LLC
XXXXXXX INVESTMENT CO., INC.
XXXXX X. XXXXX
XXXXXX INVESTMENT LLC
EMAGEON, INC.
FIRST AMENDMENT AND JOINDER TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS FIRST AMENDMENT AND JOINDER ("Amendment") to the Amended and Restated
Registration Rights Agreement of Emageon, Inc., dated October 2, 2001 (the
"Agreement"), is made as of May 30, 2003, by and among EMAGEON, INC., a Delaware
corporation (the "Company"), those holders of the Company's Series A Preferred
Stock, Series B Preferred Stock, Series B-1 Preferred Stock, and Series C
Preferred Stock parties to the Agreement, Xxxxxxx X. Xxxx, Xx., Xxxx X. York,
and the undersigned parties holding all of the Company's outstanding shares of
Series D Preferred Stock. Capitalized terms used herein but not otherwise
defined shall have the meanings given to such terms in the Agreement.
WITNESSETH:
WHEREAS, the Series A Holders, Series B Holders, Series B-1 Holders,
Series C Holders, Xxxx, and York (collectively, the "Existing Parties") are
parties to the Agreement;
WHEREAS, Section 12 of the Agreement provides that the Company shall not
grant demand registration rights to any party or any incidental registration
rights that are superior to or pari passu with the incidental registration
rights of the Investor Holders without the written consent of Investor Holders
representing in the aggregate more than 50% of the Registrable Shares then held
by such Investor Holders;
WHEREAS, pursuant to Section 13 of the Agreement, any term of the
Agreement may be amended with the written consent of the Company and Holders
representing in the aggregate more than 50% of the Registrable Shares, and any
amendment effected in accordance with such Section 13 of the Agreement shall be
binding upon each Holder, each future Holder and the Company;
WHEREAS, the Company desires to amend the Agreement;
WHEREAS, (i) the undersigned Investor Holders, which hold more than 50% of
the Registrable Shares held by Investor Holders, and (ii) the undersigned
Existing Parties, which hold more than 50% of the Registrable Shares, desire to
amend the Agreement to extend to the holders of the Company's Series D Preferred
Stock the rights and obligations of a Holder under the Agreement; and
WHEREAS, the undersigned holders of all of the outstanding shares of the
Company's Series D Preferred Stock desire to become parties to the Agreement, as
amended by this Amendment.
NOW, THEREFORE, in consideration of the premises, and the mutual terms and
conditions set forth herein, it is hereby agreed by and among the Company, the
Series A Holders, Series B Holders, Series B-1 Holders, Series C Holders, Xxxx
and York that the Agreement is hereby amended in accordance with this Amendment,
and the undersigned
holders of all of the outstanding shares of the Company's Series D Preferred
Stock shall become parties to the Agreement, as amended by this Amendment:
1. AMENDMENTS.
(a) The initial paragraph of the Agreement is hereby deleted in its
entirety and replaced with the following:
"This Amended and Restated Registration Rights Agreement (the "AGREEMENT")
is made and entered into as of October 2, 2001, by and among Emageon,
Inc., a Delaware corporation (the "COMPANY"), those holders of the Series
A Preferred Stock of the Company listed on Schedule 1 attached hereto and
made a part hereof (each, a "SERIES A HOLDER" and collectively, the
"SERIES A HOLDERS"), those holders of the Series B Preferred Stock of the
Company listed on Schedule 2 attached hereto and made a part hereof (each,
a "SERIES B HOLDER" and collectively the "SERIES B HOLDERS"), those
holders of the Series B-1 Preferred Stock of the Company listed on
Schedule 3 attached hereto and made a part hereof (each, a "SERIES B-1
HOLDER" and collectively, the "SERIES B-1 HOLDERS"), those holders of the
Series C Preferred Stock of the Company listed on Schedule 4 attached
hereto and made a part hereof (each a "SERIES C HOLDER" and collectively
the "SERIES C HOLDERS"), those holders of the Series D Preferred Stock of
the Company listed on Schedule 5 attached hereto and made a part hereof
(each a "SERIES D HOLDER" and collectively the "SERIES D HOLDERS"),
Xxxxxxx X. Xxxx, Xx. ("XXXX"), and Xxxx X. York ("YORK") (each of Xxxx and
York, a "FOUNDER," and collectively, the "FOUNDERS")."
(b) The definition of Preferred Stock in Section 1 of the Agreement is
hereby deleted and replaced with the following:
"`Preferred Stock'" means the Series A Preferred Stock of the Company,
$0.001 par value per share, the Series B Preferred Stock of the Company,
$0.001 par value per share, the Series B-1 Preferred Stock of the Company,
$.001 par value per share, the Series C Preferred Stock of the Company,
$0.001 par value per share, and the Series D Preferred Stock of the
Company, $0.001 par value per share."
(c) The fourth sentence of Section 2(b) of the Agreement is hereby
amended by deleting the phrase "Registrable Securities" contained therein and
replacing it with the phrase "Registrable Shares".
(d) A new Schedule 5 is hereby added to the Agreement in the form
attached as EXHIBIT A hereto.
2. JOINDER. Each undersigned holder of shares of the Company's Series D
Preferred Stock hereby agrees that upon execution of this Amendment by such
person or
entity, such person or entity shall become a party to the Agreement, as amended
by this Amendment, and shall be fully bound by, and subject to, all of the
covenants, terms and conditions of the Agreement, as amended by this Amendment,
as though such person or entity were an original party thereto and shall be
deemed a Holder for all purposes thereof.
3. GENERAL PROVISIONS.
(a) NO OTHER AMENDMENTS. Except for the amendments contained in SECTION
1 of this Amendment, the Agreement shall remain in full force and effect.
(b) AUTHORIZATION. Each of Holder (which term shall include the
undersigned holders of shares of the Company's Series D Preferred Stock) hereby
represents and warrants to the Company and to each other that (i) such Holder
has full power and authority to execute, to deliver and to perform such Holder's
obligations under this Amendment; and (ii) the execution and delivery of this
Amendment has been duly and validly authorized, and all necessary action has
been taken to make this Amendment a valid and binding obligation of such Holder,
enforceable in accordance with its terms, except that the enforcement thereof
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and to general principles of equity (regardless of whether such enforcement is
considered a proceeding in equity or at law).
(c) GOVERNING LAW. This Amendment shall be governed by and construed
under the laws of the State of Delaware, as applied to agreements among Delaware
residents made and to be performed entirely within the State of Delaware, and
without regard to the conflicts of law principles as may otherwise be
applicable.
(d) BINDING ON SUCCESSORS. This Amendment shall bind and inure to the
benefit of the parties hereto, their respective heirs, executors,
administrators, successors and permitted assigns.
(e) COUNTERPARTS AND SIGNATURE BY FACSIMILE. This Amendment may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. The
facsimile signature of any party to this Amendment for purposes of execution or
otherwise is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an original
signature on an original document. At the request of any party, any facsimile or
telecopy document is to be re-executed in original form by the parties who
executed the facsimile or telecopy document. No party may raise the use of a
facsimile machine or telecopier or the fact that any signature was transmitted
through the use of a facsimile or telecopier machine as a defense to the
enforcement of this Amendment or any notice required thereof.
[THE FOLLOWING PAGE IS THE SIGNATURE PAGE]
EXHIBIT A
SCHEDULE 5
SERIES D HOLDERS
Xxxx Xxxxxxx
Xxxx X. Xxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxx Xxxxxxx
Xxx Xxxxx
Xxxx X. Xxxxx
Xxxxxxxx Xxxxxxxx Trust
Xxxxxx & Xxxx Xxxxxxx Foundation
Xxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxxx Xxxxx
Xxxx Xxxxx
GEFUltravisual
Xxxxx Xxxxxxx III Declaration of Trust
J. Xxxxxxx Xxxxx XXX
Xxxxx and Xxx Xxxxxx
MBF Investments (2000) LLC
Xxxxxx X. Xxxxx
M&I Trust Co., (FBO Xxx X. Xxxxxxxxx)
Xxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx CLU, Ltd. Pension Plan
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxx
X. Xxxx Xxxxxx, M.D.
Xxxx and Xxxxx Xxxxxxx
Xxxx Xxxxx
Xxxxxxx X. Xxxxx & Xxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxx 1972 Trust
Xxxxxxx Xxxxxxx 1972 Trust
Xxxx Xxxxxxxxx 1972 Trust
Xxxxxxx Revocable Trust Xxxxx & Xxxxxx Xxxxxxx
Xxx Xxxxx
Xxxx Reneicke
Xxxxxxx Xxxxxx
Xxxxx and Xxxxx Xxxxx
Xxxxx X. Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Revocable Trust
Xxxxx Xxxx
Xxxx X. Xxxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxx
Xxxxxxx X. Xxxxx, Xx.
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Case
Xxxxx Xxxxxx
Xxxxxxx X. Xxxxxxx or Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx and Xxxxxx Xxxxxxxxxxx Family Trust
Xxxxx Sivesand
Xxx X'Xxxxx
Xxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxx
Xxxxx X Xxxx
The Mendota Group
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxxxx
Xxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx
EMAGEON, INC.
=====================================
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
=====================================
OCTOBER 2, 2001
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (the "AGREEMENT")
is made and entered into as of October 2, 2001, by and among Emageon, Inc., a
Delaware corporation (the "COMPANY"), those holders of the Series A Preferred
Stock of the Company listed on Schedule 1 attached hereto and made a part hereof
(each, a "SERIES A HOLDER" and collectively, the "SERIES A HOLDERS"), those
holders of the Series B Preferred Stock of the Company listed on Schedule 2
attached hereto and made a part hereof (each, a "SERIES B HOLDER" and
collectively the "SERIES B HOLDERS"), those holders of the Series B-1 Preferred
Stock of the Company listed on Schedule 3 attached hereto and made a part hereof
(each, a "SERIES B-1 HOLDER" and collectively, the "SERIES B-1 HOLDERS"), those
holders of the Series C Preferred Stock of the Company listed on Schedule 4
attached hereto and made a part hereof (each a "SERIES C HOLDER" and
collectively the "SERIES C HOLDERS"), Xxxxxxx X. Xxxx, Xx. ("XXXX"), and Xxxx X.
York ("YORK") (each of Xxxx and York, a "FOUNDER," and collectively, the
"FOUNDERS").
W I T N E S S E T H:
WHEREAS, the Company, the Series A Holders, the Series B Holders and the
Founders have entered into a Registration Rights Agreement, dated June 26, 2000
(the "SERIES B AGREEMENT");
WHEREAS, the Company has entered into a Series C Preferred Stock Purchase
Agreement of even date herewith (the "PURCHASE AGREEMENT") pursuant to which
certain the Series C Holders are purchasing Series C Preferred Stock of the
Company (the "SERIES C SHARES");
WHEREAS, the obligation of the Series C Holders to purchase the Series C
Shares under the Purchase Agreement is conditioned upon, among other things, the
amendment and restatement of the Series B Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby amend and restate the Series B Agreement, and hereby
agree, as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall mean:
"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, $0.001 par value per share, of the
Company.
"Company" means Emageon, Inc., a Delaware corporation.
13
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
issued thereunder, as they each may, from time to time, be in effect.
"Holders" means each of the holders of the Preferred Stock or the
Registrable Shares listed on the Schedules hereto, each transferee of the rights
of any Holder hereunder pursuant to Section 11 hereof, and any other person or
entity who shall become a Holder pursuant to Section 22 hereof.
"Investor Holders" shall mean each of the Holders who shall hold shares of
Preferred Stock or shares issued upon conversion or exercise of any of the
shares of Preferred Stock.
"Management Holders" shall mean those Holders who are officers of the
Company and are not Investor Holders.
"Non-Recoverable Expenses" means salaries and expenses of the Company's
officers and employees performing legal and accounting duties in connection with
the Company's obligations under this Agreement.
"Preferred Stock" means the Series A Preferred Stock of the Company,
$0.001 par value per share, the Series B Preferred Stock of the Company, $0.001
par value per share, the Series B-1 Preferred Stock of the Company, $.001 par
value per share and the Series C Preferred Stock of the Company, $0.001 par
value per share.
"Public Offering" means a bona fide offering of Common Stock pursuant to a
Registration Statement.
"Registrable Shares" means (i) the shares of Common Stock issued or
issuable upon conversion of shares of Preferred Stock, and any other shares of
Common Stock held by a Holder hereunder, and (ii) any other shares of Common
Stock of the Company issued in respect of such shares (because of stock splits,
stock dividends, reclassifications, recapitalizations or similar events).
"Registration Expenses" means all expenses incurred by the Company in
complying with this Agreement, including, without limitation, (i) all Commission
and any National Association of Securities Dealers, Inc. registration and filing
fees and expenses, fees and expenses of compliance with securities and blue sky
laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Shares), expenses relating to the preparation and printing of documents and of
certificates representing the Registrable Shares, fees and expenses of any
escrow agent, trustee or custodian acting for the Company, fees and
disbursements of counsel and independent certified public accountants of the
Company (including the expenses of any special audit or "cold comfort" letters
required by or incident to such compliance), reasonable fees and disbursements
of one counsel retained
14
in connection with each registration under Section 2 or 3 hereunder by the
holders of at least a majority of the Registrable Shares being registered (which
counsel shall be reasonably satisfactory to the Company), and fees and expenses
of any special experts retained by the Company, but excluding the fees and
disbursements of any counsel or other advisors or experts retained by holders of
Registrable Shares (severally or jointly), other than the counsel and experts
specifically referred to above, and excluding any underwriter discounts, fees or
commissions attributable to the sale of the Registrable Shares; and (ii)
Non-Recoverable Expenses.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a Public Offering and sale of Common Stock of
the Company (other than (i) a registration statement on Form S-4 or Form S-8, or
their successors, or any other form for a limited purpose, (ii) any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation, (iii) a registration statement
filed in connection with an interest or dividend reinvestment plan, (iv) a
registration relating solely to employee benefit plans or to a transaction
subject to Rule 145 of the Securities Act, or (v) a registration relating to the
sale of indebtedness of the Company).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued thereunder, as they each may, from time to time, be in effect.
2. Demand Registrations.
(a) At any time after the expiration of 180 days after the closing of
the Company's initial Public Offering, one or more Investor Holders representing
in the aggregate in excess of 30% of the Registrable Shares then held by all
Investor Holders, may request, in writing, that the Company file a Registration
Statement under the Securities Act. Upon receipt of any such request, the
Company shall promptly give written notice of such proposed registration to all
Holders. Each Investor Holder shall have the right, by giving written notice to
the Company within 15 days after the Company provides its notice, to elect to
have included in such registration such of its Registrable Shares as such
Investor Holder may request in such notice of election. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration under the Securities Act of all Registrable Shares which the
Company has been requested so to register.
(b) If the Investor Holders initiating the registration request
hereunder (the "INITIATING HOLDERS") intend to distribute the Registrable Shares
covered by their request by means of an underwriting, they shall so advise the
Company as part of their request made pursuant to this Section 2 and the Company
shall include such information in the written notice referred to in Section 2(a)
hereof in such event, the right of any Investor Holder to include his or its
Registrable Shares in such registration shall be conditioned upon the inclusion
of such Investor Holder's Registrable Shares in the underwriting. All Investor
Holders proposing to distribute their securities through such underwriting shall
15
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Section 2(b), if the managing underwriter with respect to the proposed
offering advises the Investor Holders proposing to sell Registrable Shares that
would otherwise be included in the underwriting that marketing factors require a
limitation on the number of shares to be underwritten, the number of Registrable
Shares that may be included in the underwriting shall be allocated among all
such Investor Holders, including the Initiating Holders, in proportion (as
nearly as practicable) to the amount of Registrable Shares proposed to be
included in the Registration Statement by each such Investor Holder. The Company
may include shares for sale for its own account in any registration pursuant to
this Section 2 only with the consent of the holders of two-thirds of the
Registrable Securities included in such registration; provided, however, that if
the managing underwriter with respect to the proposed offering advises the
Investor Holders proposing to sell Registrable Shares that would otherwise be
included in the underwriting that marketing factors require a limitation on the
number of shares to be underwritten and the Company has included shares for sale
for its own account, then the number of shares that may be included by the
Company in the underwriting shall be reduced prior to the reduction of any
Registrable Shares of Investor Holders.
(c) The Company shall not be obligated to effect, or take any action to
effect, any registration pursuant to this Section 2:
(i) After the Company has effected three registrations pursuant to
this Section 2 and such registrations have been declared or ordered effective;
(ii) If within 12 months prior to such registration request, a
registration of securities of the Company has been effected in which Investor
Holders of Registrable Shares had the right to participate on at least a pro
rata basis relative to all stockholders of the Company entitled to participate
in such earlier registration;
(iii) If the Company receives such request for registration within
180 days preceding the anticipated effective date of a proposed underwritten
public offering of securities of the Company approved by the Board of Directors
prior to the Company's receipt of such request;
(iv) If the Board of Directors reasonably determines in good faith
that effecting such a demand registration at such time would have a material
adverse effect upon a proposed sale of all or substantially all of the assets of
the Company, or a merger, reorganization, recapitalization, or similar
transaction materially affecting the capital structure or equity ownership of
the Company which is actively being negotiated with another party; provided,
however, that the Company may only delay a demand registration for this reason
for a period not exceeding six months (or until such earlier time as such
transaction is consummated or no longer proposed); or
16
(v) If such request for registration includes only Registrable
Shares which may be sold by Holder(s) thereof who may sell all of such Holder's
Registrable Shares in the public market under Rule 144 in a three month period.
(d) At the time of any request to register Registrable Shares pursuant
to this Section 2, the Company may at its option direct that such request be
delayed for a period not in excess of three months if, in the opinion of the
Company's Board of Directors, the filing of such Registration Statement would
have a material adverse effect on the Company's ability to complete any pending
or proposed material transaction, provided that such right to delay a request
may be exercised by the Company not more than once in any twelve-month period.
(e) The Initiating Holders of any Registration Statement filed pursuant
to this Section shall designate the method of distribution of the Registrable
Shares. The Initiating Holders may designate the managing underwriter (who shall
be the lead underwriter) for any Registration Statement filed pursuant to this
Section, provided such designee is reasonably satisfactory to the Company, and
the Company may designate a co-managing underwriter in such offering, provided
such designee is reasonably satisfactory to Holders representing a majority of
the Registrable Shares to be included in the Registration. The Company shall
afford the underwriters, their accountants and attorneys full access to its
personnel and offices for the purpose of confirming the accuracy and
completeness of the Registration Statement.
(f) If in the opinion of the underwriters selected to manage the
underwriting, more Common Stock could be sold than is represented by the
Registrable Shares included in the registration without adversely affecting the
price per share, or with the consent of Holders representing two-thirds of the
Registrable Shares to be included, the Company shall be entitled to expand the
offering to include newly issued Common Stock or Common Stock held by third
parties. If the Common Stock so included represents more than half of all Common
Stock to be offered in the Registration Statement, the registration may, at the
option of the Initiating Holders, be deemed to be an incidental registration
under Section 3, rather than a required registration under this Section 2, and
the registration rights of the Holders provided in Section 2(a) shall remain
fully available as if the registration had originated under Section 3 rather
than under Section 2.
(g) Notwithstanding anything set forth elsewhere in this Section 2, the
Company shall have no responsibility to cause a Registration Statement to become
effective (i) at a time when it would be required under the rules and
regulations of the Securities and Exchange Commission to prepare and file
audited financial statements for a period other than a completed fiscal year, or
(ii) when the Company would be required to prepare and file audited financial
statements for a completed fiscal year prior to 90 days following the end of
such year.
(h) If any Registration Statement prepared pursuant to this Section 2 is
not filed or does not become effective as a result of the decision of the
Initiating Holders or any underwriter designated by them, the obligation of the
Company to prepare and file a
17
Registration Statement at the request of such Initiating Holders shall
nevertheless have been satisfied; provided that if the decision not to file the
Registration Statement or to withdraw the Registration Statement prior to it
becoming effective is the result of a material adverse change in the business of
the Company, the registration rights of the Holders provided in Section 2(a)
shall remain fully available as if the registration had not been requested by
the Initiating Holders. If the Registration Statement otherwise fails to become
effective, the registration rights of the Holders provided in Section 2(a)
remain fully available as if the registration had not been requested by the
Initiating Holders.
3. Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement in
connection with an offering of its securities solely for cash (other than the
Company's initial public offering, and other than a registration in connection
with a Company stock plan or a registration pursuant to Rule 145 under the
Securities Act) it shall, at such time, promptly give written notice to all
Holders of such registration and, upon the written request of a Holder or
Holders given within 10 days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), the Company shall use its best efforts to cause all Registrable Shares
that the Company has been requested by such Holder or Holders to register 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 Holder or Holders; provided, that the Company
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 3 without obligation to any Holder.
(b) In connection with any offering under this Section 3 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the Holders holding such Registrable Shares
thereof accept the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it and enter into a customary underwriting
agreement, and then only in such quantity as will not, in the opinion of the
managing underwriter, jeopardize the success of the offering by the Company. If
in the opinion of the managing underwriter the registration of all, or any part
of, the Registrable Shares which Holders have requested to be included would
adversely affect such Public Offering, then the Company shall be required to
include in the underwriting only that number of Registrable Shares, if any, that
the managing underwriter believes may be sold without causing such adverse
effect, and the amount of securities to be offered for the accounts of all
persons seeking to include securities of the Company in the Registration
Statement shall be reduced in the following order of priority to the extent
necessary to cause the amount to be included in the Registration Statement not
to exceed the amount recommended by such managing underwriter:
(i) first, the amount of securities to be offered for the accounts
of Company stockholders other than Holders ("OTHER STOCKHOLDERS") that do not
have a contractual right to require the Company to include the securities held
by them in a
18
registration shall be reduced pro rata (based upon the amount of securities each
such person sought to include in the offering) to zero, if necessary,
(ii) next, the amount of securities to be offered for the account
of Other Stockholders that have a contractual right (subordinate to the Holders'
rights hereunder) to require the Company to include the securities held by them
in a registration shall be reduced pro rata (based upon the amount of securities
each such person sought to include in the offering) to zero, if necessary,
(iii) next, the amount of securities to be offered for the account
of Management Holders of Registrable Shares and all Other Stockholders that have
a contractual right (subordinate to the Investor Holders' rights hereunder) to
require the Company to include the securities held by them in a registration
shall be reduced pro rata (based on the amount of securities each such person
sought to include in the offering) to zero, if necessary, and
(iv) finally, the amount of securities to be offered for the
account of the Investor Holders of Registrable Shares and all Other Stockholders
that have a contractual right (on parity with the Investor Holders' rights
hereunder) to require the Company to include the securities held by them in a
registration shall be reduced pro rata (based upon the amount of securities each
such stockholder sought to include in the offering) to zero, if necessary.
4. Registrations on Form S-3.
(a) Notwithstanding any other term or provision of this Agreement, at
such time as the Company shall have qualified for the use of Form S-3
promulgated under the Securities Act, the Investor Holders representing in the
aggregate in excess of five percent (5%) of the Registrable Shares then held by
all Investor Holders shall have the right to request in writing registrations on
Form S-3 (or such successor form) of Registrable Shares, which request or
requests shall (i) specify the number of Registrable Shares intended to be sold
or disposed of, (ii) state the intended method of disposition of such
Registrable Shares, and (iii) relate to Registrable Shares having an anticipated
aggregate offering price of not less than $1,000,000, provided, however, the
Investor Holders may only make one such request in any 12-month period. A
requested registration on Form S-3 pursuant to this Section 4 shall not count as
a registration demanded pursuant to Section 2 hereof. During the pendency of any
offering under this Section 4 if the Company shall inform the Holders that there
is material non-public information regarding the Company, the Holders shall
cease selling activities in such offering and the Company shall promptly advise
the members of its Board of Directors of the material non-public information (to
the extent not previously disclosed to them) and a decision shall be made
whether or when such information should be publicly disclosed. The Holders shall
not recommence selling activities until the Company shall inform the Holders
that there is no material non-public information regarding the Company;
provided, however, the Company shall use its best efforts to insure that the
delay arising out of the failure to disclose such information does not persist
for more than 30 days.
19
(b) The Company shall not be obligated to effect, or take any action to
effect, any registration pursuant to this Section 4:
(i) If within 12 months prior to such registration request, a
registration of securities of the Company has been effected in which Investor
Holders of Registrable Shares had the right to participate on at least a pro
rata basis relative to all stockholders of the Company entitled to participate
in such earlier registration;
(ii) If the Company receives such request for registration within
90 days preceding the anticipated effective date of a proposed underwritten
public offering of securities of the Company approved by the Board of Directors
prior to the Company's receipt of such request;
(iii) If the Board of Directors reasonably determines in good faith
that effecting such a demand registration at such time would have a material
adverse effect upon a proposed sale of all or substantially all of the assets of
the Company, or a merger, reorganization, recapitalization, or similar
transaction materially affecting the capital structure or equity ownership of
the Company which is actively being negotiated with another party; provided,
however, that the Company may only delay a demand registration for this reason
for a period not exceeding six months (or until such earlier time as such
transaction is consummated or no longer proposed) and may not utilize this right
more than once in any 12 month period; or
(iv) If such request for registration includes only Registrable
Shares which may be sold by Holder(s) thereof who may sell all of such Holder's
Registrable Shares in the public market under Rule 144 in a three month period.
(c) At the time of any request to register Registrable Shares pursuant
to this Section 4, the Company may at its option direct that such request be
delayed for a period not in excess of three months if, in the reasonable opinion
of the Company's Board of Directors, the filing of such Registration Statement
would have a material adverse effect on the Company's ability to complete any
pending or proposed material transaction, provided that such right to delay a
request may be exercised by the Company not more than once in any twelve-month
period.
5. Registration Procedures. If and whenever the Company is required by
Sections 2, 3, or 4 of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective for such reasonable period of time as
required to complete the Public Offering;
20
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective for such reasonable period of time as required
to complete the Public Offering, but in no event greater than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all shares covered by such Registration Statement.
(c) provide the selling stockholders and the underwriters (which terms,
for purposes of this Agreement shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if any,
of the shares being sold and counsel for such underwriters and counsel for such
selling stockholders (which counsel shall be subject to approval by the Company,
such approval not to be unreasonably withheld) the opportunity to participate in
the preparation of the Registration Statement, each prospectus included therein
or filed with the Commission, and each amendment or supplement thereto; and make
available for inspection by such selling stockholders or other persons such
financial and other information, books and records of the Company and cause the
officers, directors and employees of the Company and counsel and independent
certified public accountants of the Company to respond to such inquiries as
shall be reasonably necessary, in the opinion of respective counsel to such
selling stockholders and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act;
(d) promptly notify (in writing, if so requested) the selling
stockholders and the underwriters, if any, (i) when the Registration Statement,
the prospectus or any prospectus supplement or post-effective amendment has been
filed, and with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any material comments by
the Commission with respect thereto or any request by the Commission for
amendments or supplements to the Registration Statement or the prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iv) of the occurrence of any
event, at any time during which the Registration Statement remains effective,
that causes the representations and warranties of the Company contemplated by
Section 8 hereof to cease to be true and correct in all material respects, (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, or (vi) of the
occurrence or failure to occur of any event, or change in circumstance, at any
time when a prospectus is required to be delivered under the Securities Act, as
a result of which the Registration Statement, prospectus, any prospectus
supplement, or any document incorporated by reference in any of the foregoing
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
21
(e) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement hereunder or any
post-effective amendment thereto at the earliest practicable date;
(f) if requested by the managing underwriter or underwriters or by
selling stockholders representing at least a majority of the Registrable Shares
being included in the Registration Statement, promptly incorporate in a
prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters or such selling stockholders reasonably
specify should be included therein relating to the sale of the Registrable
Shares, including, without limitation, information with respect to the number or
amount of Registrable Shares being sold to such underwriters, the purchase price
being paid therefor by such underwriters and with respect to any other terms of
the underwritten (or best efforts underwritten) offering of the Registrable
Shares to be sold in such offering; and make all required filings of such
prospectus supplement or post-effective amendment promptly after notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment; provided that the Company and its counsel are reasonably satisfied
that such additional information does not constitute 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;
(g) as expeditiously as possible furnish to each selling stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling stockholder may reasonably request in order to
facilitate the Public Offering; and furnish to each selling stockholder and each
underwriter, if any, such number of copies of the Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in the Registration Statement (including each
preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as such selling
stockholder and underwriter, if any, may reasonably request in order to
facilitate the Public Offering; the Company consents to the use of the
prospectus or any amendment or supplement thereto by each of the selling
stockholders and the underwriters in connection with the offering and sale of
the Registrable Shares covered by the prospectus or any supplement or amendment
thereto;
(h) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or blue sky laws of such states as the underwriters shall reasonably
request, and do any and all other acts and things that may be reasonably
necessary or desirable to enable the Public Offering to be consummated;
provided, however, that the Company shall not be required in connection with
this Section 5(h) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;
(i) use its best efforts to cause all of the Registrable Shares to be
included in a Registration Statement hereunder to be registered with or approved
by such other
22
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Public Offering to be
consummated;
(j) facilitate the timely preparation and delivery of certificates
representing Registrable Shares to be sold; and
(k) provide a CUSIP number for all Registrable Shares, not later than
the effective date of the Registration Statement.
If the Company has delivered preliminary or final prospectuses to the
selling stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling stockholders and, if requested, the selling stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling stockholders shall be free to resume making offers of
the Registrable Shares.
6. Allocation of Expenses. The Company shall pay all Registration
Expenses of all registrations under this Agreement including, without
limitation, Registration Statements that are not declared effective as
contemplated in Section 2(h) hereof, except that after the second registration
under Section 4 hereof, the Registration Expenses for a registration under
Section 4 shall be paid by the participating sellers in proportion to the number
of shares sold by each or as shall otherwise be agreed by such participating
sellers other than the Company (except to the extent the Company shall be a
seller). All underwriting discounts and selling commissions applicable to the
sale of the Registrable Shares shall be borne by the participating sellers in
proportion to the number of shares sold by each or as shall otherwise be agreed
to by such participating sellers other than the Company (except to the extent
the Company shall be a seller).
7. Indemnification.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company shall indemnify
and hold harmless the seller of such Registrable Shares, each director, officer,
partner, or member of such seller, each underwriter of such Registrable Shares,
and each other person, if any, who controls such seller or underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, including, without limitation,
subject to Section 7(c) hereof, any amounts paid in settlement, to which such
seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities laws or otherwise, 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 any material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such
23
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Company shall
reimburse such seller, underwriter and each such controlling person for any
legal or any other expenses reasonably incurred by such seller, underwriter or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, (i) that the Company
shall not be liable to any such seller, underwriter or controlling person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller or
underwriter or controlling person specifically for use in the preparation
thereof and (ii) provided, however, that the indemnity agreement contained in
this Section 7(a) 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.
Such indemnification and reimbursement of expenses shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller,
its directors, officers, partners, or members such underwriter, its directors or
officers or such controlling person, and shall survive the transfer of any or
all Registrable Shares by such seller.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, shall indemnify and hold harmless the
Company, each of its directors and officers, each other seller and each
underwriter, if any, and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities laws or
otherwise, 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
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final .prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; and each such
seller shall reimburse the Company, each of its directors and officers, each
underwriter and each controlling person for any legal or any other expenses
reasonably incurred by the Company, such directors and officers, underwriters
and controlling persons in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
24
settlement is effected without the consent of such seller, provided, further,
however, that, to the extent permitted by law, the indemnification obligation of
each seller of Registrable Shares shall be limited to the net proceeds received
by such selling stockholder in the Public Offering in dispute. Such
indemnification and reimbursement of expenses shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company, its
officers or directors, any such other seller, its officers or directors, or any
such controlling person, and shall survive the transfer of any or all
Registrable Shares by any such other seller.
(c) Each party entitled to indemnification under this Section 7 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying party to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); provided, however, that an Indemnified party shall have
the right to retain its own counsel (limited to one counsel for all Indemnified
Parties), with the fees and expenses of such counsel to be paid by the
Indemnifying Party, if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. The failure by an Indemnified
Party to deliver written notice to the Indemnifying Party within a reasonable
time of the Indemnified Party's discovery of such claim, if materially
prejudicial to its ability to defend such claim, shall relieve the Indemnifying
Party of its obligations under this Section 7 but only to the extent of such
material prejudice. The Indemnified Party may participate in such defense at
such party's expense. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each 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 or
litigation.
(d) (i) If for any reason the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under this Section 7 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to herein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims damages or liabilities (or
actions in respect thereof), in such proportion as is appropriate to reflect the
relative fault of each Indemnifying Party and the Indemnified Party as well as
any other relevant equitable considerations; provided, however, that to the
extent permitted by law, the indemnification obligation of each seller of
Registrable Shares shall be limited to the net proceeds received by such Selling
Stockholders in the Public Offering in dispute. The relative fault of each
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a
25
material fact, has been made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge. access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages or liabilities referred to above shall be deemed to include, subject to
the limitations set forth in Section 7(c), any legal or other fees or expenses
reasonably incurred by such party.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the sellers or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. 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.
(iii) The contribution provided for in this Section 7(d) shall
survive, with respect to a Holder, the transfer of Registrable Shares by such
Holder and with respect to a Holder or the Company shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Indemnified Party.
8. Agreements with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2 hereof, the Company agrees to enter
into such customary agreements (including an underwriting agreement) and take
such other actions in connection therewith as the Holders representing at least
a majority of Registrable Shares to be included in a Registration Statement
hereunder shall reasonably request in order to expedite or facilitate the Public
Offering and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten registration
(a) make such representations and warranties to the selling stockholders and the
underwriters, if any, in form, substance and scope as are customarily made in
such a registration; (b) obtain an opinion of counsel to the Company in
customary form and covering such matters of the type customarily covered by such
opinion as the Holders representing at least a majority of Registrable Shares to
be included in such registration and the underwriters, if any, may reasonably
request, addressed to each selling stockholder and the underwriters, if any, and
dated the effective date of such Registration Statement (or, if such
registration includes an underwritten Offering, dated the date of the closing
under the underwriting agreement); (c) obtain a "cold comfort" letter from the
independent certified public accountants of the Company addressed to the selling
stockholders and the underwriters, if any, (and which may also be addressed to
the Board of Directors of the Company) dated the effective date of such
Registration Statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement), such
letter to be in customary form and covering such matters of the type customarily
covered by such letter; and (d) deliver such documents and certificates as may
be reasonably requested by the Holders representing at least a majority of
Registrable Shares being sold and the managing
26
underwriters, if any, to evidence compliance with clause (a) above and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company.
9. Information by Holder. It shall be a condition precedent to the
obligations of the Company under this Agreement that each Holder of Registrable
Shares to be included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.
10. Rule 144 Requirements. After the registration by the Company of a
class of securities under Section 12 of the Exchange Act, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 (or any successor rule) under the Securities
Act;
(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 Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) furnish to any Holder upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the closing of the first sale of securities by
the Company pursuant to a Registration Statement), and of the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and 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.
11. Transfer of Rights.
(a) The rights granted to a Holder under this Agreement may be
transferred by such Holder to another Holder or to any transferee if (i) there
is transferred to such transferee at least 10% of the Registrable Shares
originally issued by the Company to such transferring Holder and (ii) the
Company is given written notice by the transferee at the time of such transfer
stating the name and address of the transferee and identifying the securities
with respect to which such rights are being assigned; provided that the failure
to provide such notice shall not restrict the transfer and use of the rights
hereunder except to the extent that the Company is materially prejudiced
thereby. Any transferee to whom rights under this Agreement are transferred
shall, as a condition to such transfer, deliver to the Company a written
instrument by which such transferee agrees to be bound by. the obligations
imposed upon Holders under this Agreement to the same extent as if such
transferee were a Holder hereunder.
27
(b) Notwithstanding anything to the contrary herein, any Holder may
transfer rights granted to such Holder under this Agreement to any affiliate of
such Holder, any liquidating trust established with respect to such Holder or
any limited partner stockholder or member of such Holder in connection with a
distribution of assets to such Holder's partners, stockholders or members if
such transferee is a transferee of shares of Preferred Stock or Registrable
Shares and such transferee delivers to the Company a written instrument by which
such transferee agrees to be bound by the obligations imposed upon Holders under
this Agreement to the same extent as if such transferee were a Holder hereunder.
In the event of such transfer, such transferee shall be deemed a Holder for
purposes of this Section 11 and may again transfer such rights to any other
person or entity which acquires shares of Preferred or Registrable Shares from
such transferee, subject to and in accordance with Section 11(a) hereof.
12. Other Registration Rights. The Company shall not grant demand
registration rights to any party or any incidental registration rights that are
superior to or pari passu with the incidental registration rights of the
Investor Holders without the written consent of Investor Holders representing in
the aggregate more than 50% of the Registrable Shares then held by such Investor
Holders.
13. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived, either generally
or in a particular instance and either retroactively or prospectively, with the
written consent of the Company and Holders representing in the aggregate more
than 50% of the Registrable Shares, provided that no such amendment or waiver of
any term of this Agreement shall affect any outstanding Registrable Shares on a
disproportionate basis without the specific consent of each Holder affected
thereby. Any amendment or waiver effected in accordance with this Section 13
shall be binding upon each Holder, each future Holder and the Company. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instance, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision. Notwithstanding
anything to the contrary in this Section 13, the Company shall be entitled to
add additional purchasers of Series C Shares pursuant to Section 2.1 of the
Purchase Agreement as parties to this Agreement as and in the manner set forth
in such Section 2.1, and each such additional purchaser shall thereafter be
deemed to be an Investor Holder for all purposes hereunder.
14. "Market Stand-Off" Agreement. Each Holder hereby agrees that, during
the period of duration specified by the Company and an underwriter of Common
Stock or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Securities Act, it shall
not, to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without limitation,
any short sale), grant any option to purchase or otherwise transfer or dispose
of (other than to donees who agree to be similarly bound) any securities of the
Company held by it at any time during such period except Common Stock included
in such registration; provided, however, that such market stand-off time period
shall not exceed 180 days.
28
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Shares of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this Section
14 shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms. which may be promulgated in the
future, or a registration relating solely to a Commission Rule 145 transaction
on Form S-14 or similar forms which may be promulgated in the future.
15. Entire Agreement: Successors and Assigns of the Company.
(a) This Agreement embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter.
(b) This Agreement shall be binding, in accordance with its terms, upon
any successor, by way of merger, consolidation, sale of assets or otherwise, of
the Company.
16. Counterparts and Signature by Facsimile. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. The
facsimile signature of any party to this Agreement for purposes of execution or
otherwise, is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an original
signature on an original document. At the request of any party, any facsimile or
telecopy document is to be re-executed in original form by the parties who
executed the facsimile or telecopy document. No party may raise the use of a
facsimile machine or telecopier or the fact that any signature was transmitted
through the use of a facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any notice required thereof.
17. Headings. The headings of the sections of this Agreement have been
added for convenience only and shall not be deemed to be a part of this
Agreement.
18. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
severable provision.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard for the
conflict of laws rules thereof.
20. Notices. All notices and other communications under this Agreement
shall be in writing and shall be (a) sent by facsimile transmission and by
certified or registered mail, return receipt requested, courier or overnight
mail, or (b) sent by certified
29
or registered mail, return receipt requested, courier or overnight mail (i) if
to any Holder, at the registered facsimile number and address of such Holder as
set forth in the register kept at the principal office of the Company, or (ii)
if to the Company, to 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000, Attention: Xxxxxxx X. Xxxx, Xx., or at such other address or facsimile
number as it shall have furnished in writing to all holders of Registrable
Shares at the time outstanding. Any written communication so addressed, sent by
facsimile transmission or certified or registered mail, return receipt
requested, courier or overnight mail, shall be deemed to have been given when
sent via facsimile or mailed. All other written communications shall be deemed
to have been given upon receipt thereof.
21. Termination. All registration rights granted hereunder shall
terminate five (5) years after the date of the Company's initial Public
Offering. Notwithstanding the foregoing, the Company shall in no event be
required to register shares of Common Stock for sale hereunder by any Holder
who, at the time of such registration, would be permitted to sell all such
shares in the public market immediately under Rule 144 as then in effect.
22. Subsequent Holders. Subject to Section 12 hereof, the Company shall
be entitled to include additional holders of its capital stock pursuant to any
additional issuance of the Company's capital stock as parties to this Agreement,
and to treat such purchasers as "Holders" hereunder, by executing a counterpart
signature page to this Agreement with such additional holder and amending the
Schedules attached hereto, and upon the execution of such additional signature
page such person shall become a party hereto and such additional signature pages
shall be an original part of this Agreement.
23. Mutual Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED THERETO.
[THE FOLLOWING PAGE IS THE SIGNATURE PAGE]
30
Schedule 1
SERIES A HOLDERS
XXXX PARTNERS, LLC
THE XXXX X. XXXXXXXXXX III REVOCABLE TRUST
PARADIGM VENTURE PARTNERS, L.P.
XXXXXXX X. XXXXXX
XXXXXXX X. XXXX, XX.
XXXXXXX X. XXXXXXX
XXXXX FAMILY INTERNET PARTNERS
XXXX X. XXXXXXXX
XXXXXX X. XXXXXXXX AND XXXX X. XXXXXXXX TENANTS IN COMMON
XXXX X. XXXXXXXX TTEE XXXXXX X. XXXXXXXX, XX. CHILDREN'S TRUST
U/A DTD. 12/20/95 FBO XXX XXXXXXXXX XXXXXXXX
Schedule 2
SERIES B HOLDERS
STF INSTITUTIONAL PARTNERS II, L.P.
STF PARTNERS QP II, L.P.
STF PARTNERS II, L.P.
HARBINGER/AURORA QP VENTURE FUND, L.L.C.
HARBINGER/AURORA VENTURE FUND, L.L.C.
XXXXXXX INVESTMENT CO., INC.
XXXXX X. XXXXX
RICHGOOD CORPORATION
XXXXXX ONE INVESTMENT, L.L.C.
SOUTHEASTERN TECHNOLOGY FUND, L.P.
PARADIGM VENTURE PARTNERS, L.P.
GREYSTONE CAPITAL PARTNERS I, L.L.C.
XXXX XXXXXX
2
Schedule 3
SERIES B-1 HOLDERS
ROPAR, LTD.
ROBTEL, INC.
MMM EMAGEON, L.L.C.
XXXXXX X. XXXXXXXX
THE PERMANENTE FEDERATION LLC
XXXXXX FOUNDATION HOSPITALS
T.I. EMA, INC.
3
Schedule 4
SERIES C HOLDERS
STF INSTITUTIONAL PARTNERS II, L.P.
STF PARTNERS QP II, L.P.
STF PARTNERS II, L.P.
HARBINGER/AURORA QP VENTURE FUND, L.L.C.
HARBINGER/AURORA VENTURE FUND, L.L.C.
XXXXXXX INVESTMENT CO., INC.
XXXXX X. XXXXX
RICHGOOD CORPORATION
PARADIGM VENTURE PARTNERS, L.P.
GREYSTONE CAPITAL PARTNERS I, L.L.C.
XXXXXX INVESTMENT LLC
XXXXXXX X. XXXXXX
MEI HOLDINGS, LLC
DELTA VENTURE PARTNERS I, L.P.
4
