Exhibit 4.01
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of April 21, 2000 by and among Exodus Communications, Inc., a Delaware
corporation (the "Company"), Mirror Image Internet, Inc., a Delaware corporation
("MII"), and Xxxxxxx.xxx Inc., a Cayman Islands corporation ("Xcelera") (each of
MII and Xcelera are individually a "Holder," and collectively, the "Holders").
R E C I T A L S
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A. This Agreement is entered into in connection with and is ancillary to a
Common Stock Purchase Agreement dated as of March 22, 2000 among the Company and
the Holders (the "MII Purchase Agreement"), and a Common Stock Purchase
Agreement dated as of March 22, 2000 between the Company and Xcelera (the
"Xcelera Purchase Agreement"). Pursuant to the MII Purchase Agreement, the
Company will purchase from MII shares of MII's Common Stock ("MII Common Stock")
in exchange for cash and shares of the Company's common stock ("Company Common
Stock"). Pursuant to the Xcelera Purchase Agreement, the Company will purchase
from Xcelera shares of MII Common Stock in exchange for cash and shares of
Company Common Stock. References to capitalized terms in this Agreement that
are not otherwise defined herein will have the meaning ascribed to them in the
MII Purchase Agreement.
B. The parties have agreed that, in connection with the issuance of
Company Common Stock pursuant to the MII Purchase Agreement and the Xcelera
Purchase Agreement, the Holders will each be granted certain registration rights
on the terms set forth herein.
C. To induce MII and Xcelera to sell such shares of Common Stock to the
Company and to enter into the MII Purchase Agreement and the Xcelera Purchase
Agreement, the Company has agreed to grant the Holders registration rights, all
as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. REGISTRATION RIGHTS.
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(a) The Company shall use its reasonable best efforts to cause the
shares of Company Common Stock issued in connection with the MII Purchase
Agreement and the Xcelera Purchase Agreement, and any securities issued in
respect thereof, or in substitution therefor, in connection with any stock
split, dividend or distribution or any recapitalization, combination of shares
or the like (the "Registrable Securities") to be registered under the Securities
Act of 1933, as amended (the "Securities Act") within ten business days of the
Closing (as defined in the MII Purchase Agreement) so as to permit the resale or
distribution thereof, and in connection therewith shall prepare and file a shelf
Registration Statement under Rule 415 of the Securities Act on Form S-3
("Registration Statement") with the Securities and Exchange Commission ("SEC")
as soon as reasonably practical after the date hereof, and shall use its
reasonable best efforts to cause the Registration Statement to become effective
as soon as reasonably practical thereafter. The Company shall not be required
to effect more than one registration under this Section 1; provided that if a
Holder advises the Company that it intends to distribute the Registrable
Securities by means of an underwriting, then the Company shall be required to
assist in no more than one such underwritten offering, which offering shall be
consummated within a reasonable time from the date of the Holder's request;
provided further that, in the event that an offering is effected by means of an
underwriting, the Company shall have the right to select the underwriter (which
shall be reasonably acceptable to the Holders).
(b) The Company shall (i) prepare and file with the SEC the
Registration Statement in accordance with Section 1(a) hereof with respect to
the shares of Registrable Securities and shall use all reasonable
best efforts to cause the Registration Statement to remain effective for a
period ending on the last to occur of the date all of the shares of Registrable
Securities registered thereunder (x) shall have been sold under the Registration
Statement or under Rule 144 under the Securities Act, or (y) may be sold under
Rule 144(k); (ii) prepare and file with the SEC such amendments and supplements
to the Registration Statement and the prospectus used in connection therewith as
may be necessary, and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities proposed to be
registered in the Registration Statement until the termination of effectiveness
of the Registration Statement; and (iii) furnish to each holder of Registrable
Securities (a "Holder") such number of copies of any prospectus (including any
preliminary prospectus and any amended or supplemented prospectus) in conformity
with the requirements of the Securities Act, and such other documents, as each
Holder may reasonably request in order to effect the offering and sale of the
shares of the Registrable Securities to be offered and sold, but only while the
Company shall be required under the provisions hereof to cause the Registration
Statement to remain current.
(c) The Company shall use reasonable best efforts to register and
qualify the securities covered by the Registration Statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, 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.
(d) In the event of any underwritten public offering, the Company
shall enter into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter(s) of such offering.
Each Holder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.
(e) The Company shall furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a
"comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(f) The Company shall notify each Holder of Registrable Securities
covered by the Registration Statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(g) Notwithstanding any other provision of this Section 1, the Company
shall have the right at any time to require that all Holders suspend further
offers and sales of Registrable Securities whenever, and for so long as, in the
good faith judgment of the Board of Directors of the Company, based on the
advice of outside counsel, it would materially adversely affect any financing,
acquisition or other material transaction of the Company out of the ordinary
course of business or would require premature disclosure thereof or of any other
material event out of the ordinary course of the business of the Company if the
offers and sales were not suspended (the "Suspension Right"). In the event the
Company exercises the Suspension Right, such suspension will continue for the
period of time reasonably necessary for disclosure to occur at a time that is
not materially detrimental to the Company or until such time as the information
or event is no longer material, each as determined in good faith by the Company
after consultation with counsel. The Company will promptly give the Holders
notice, in a writing signed by an executive officer of the Company of any such
suspension (the "Suspension Notice"). The Company agrees to notify the Holders
promptly upon termination of the suspension (the "Resumption Notice"). The
period
during which the Company is required to keep the Registration Statement
effective shall be extended by a period equal in length to any and all periods
during which offers and sales of Registrable Securities are suspended pursuant
to exercise of the Suspension Right; provided that the Company shall not have
the right to suspend offers and sales for more than ninety days during any
twelve-month period.
(h) The Company shall pay all of the out-of-pocket expenses, other
than underwriting discounts and commissions, if any, incurred in connection with
any registration of Registrable Securities pursuant to this Section 1,
including, without limitation, all registration and filing fees, printing
expenses, transfer agents' and registrars' fees, the fees and disbursements of
the Company's outside counsel and independent accountants; provided that the
Holders shall be responsible for all such out-of-pocket expenses in the event
that the offering made pursuant to the registration is underwritten.
(i) To the fullest extent permitted by law, the Company will
indemnify, defend, protect and hold harmless each selling Holder, each
underwriter of the Company Common Stock being sold by such Holders pursuant to
this Section 1, each person, if any, who controls any such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and their respective affiliates, officers,
directors, partners, successors and assigns (each a "Holder Indemnitee"),
against all actions, claims, losses, damages, liabilities and expenses to which
they or any of them become subject under the Securities Act, the Exchange Act or
under any other statute or at common law or otherwise and, except as hereinafter
provided, will promptly reimburse each such Holder Indemnitee, for any legal or
other expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of material fact in any registration statement and any prospectus
filed pursuant to Section 1 or any post-effective amendment thereto 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 or any violation by the Company of any rule or regulation promulgated
under the Securities Act, the Exchange Act or any statute, regulation or law
applicable to the Company and relating to action or inaction required of the
Company in connection with such registration; provided, however, that the
Company shall not be liable to any such Holder Indemnitee in respect of any
claims, losses, damages, liabilities and expenses resulting from any untrue
statement or alleged untrue statement, or omission or alleged omission made in
reliance upon and in conformity with information furnished in writing to the
Company by such Holder Indemnitee specifically for use in connection with such
registration statement and prospectus or post-effective amendment.
(j) To the fullest extent permitted by law, each selling Holder of
Registrable Securities registered in accordance with Section 1 will indemnify
the Company, each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, each underwriter of the Company Common
Stock and their respective affiliates, officers, directors, partners, successors
and assigns (each an the "Company Indemnitee") against any actions, claims,
losses, damages, liabilities and expenses to which they or any of them may
become subject under the Securities Act, the Exchange Act or under any other
statute or at common law or otherwise, and, except as hereinafter provided, will
promptly reimburse each Company Indemnitee for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
in any registration statement and any prospectus filed pursuant to Section 1 or
any post-effective amendment thereto, or any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such Holder
specifically for use in connection with such registration statement, prospectus
or post-effective amendment; provided, however, that the obligations of each
such selling Holder hereunder shall be limited to an amount equal to the
proceeds to such Holder from the sale of such Holder's Registrable Securities as
contemplated herein.
(k) Each person entitled to indemnification under this Section 1 (an
"Indemnified Person") shall give notice to the party required to provide
indemnification (the "Indemnifying Person") promptly after such Indemnified
Person has actual knowledge of any claim as to which indemnity may be sought and
shall permit the Indemnifying Person to assume the defense of any such claim and
any litigation resulting therefrom,
provided that counsel for the Indemnifying Person who conducts the defense of
such claim or any litigation resulting therefrom shall be approved by the
Indemnified Person (whose approval shall not unreasonably be withheld), and the
Indemnified Person may participate in such defense at such party's expense
(unless the Indemnified Person has reasonably concluded that there may be a
conflict of interest between the Indemnifying Person and the Indemnified Person
in such action or unless the Indemnifying Person fails to assume the defense or
pursue it in good faith, in which case the fees and expenses of counsel for the
Indemnified Person shall be at the expense of the Indemnifying Person), and
provided further that the failure of any Indemnified Person to give notice as
provided herein shall not relieve the Indemnifying Person of its obligations
under this Section 1 except to the extent the Indemnifying Person is materially
prejudiced thereby. No Indemnifying Person, in the defense of any such claim or
litigation, shall (except with the consent of each Indemnified Person) consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Person of a release from all liability in respect to such claim or
litigation. Each Indemnified Person shall furnish such information regarding
itself or the claim in question as an Indemnifying Person may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(l) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which the Company or any
Holder makes a claim for indemnification pursuant to this Section 1 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding that this Section 1 provides for indemnification, in such case,
then the Company and such Holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and of the Holder on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations or, if the
allocation provided herein is not permitted by applicable law, in such
proportion as shall be permitted by applicable law and reflect as nearly as
possible the allocation provided herein. The relative fault of the Company on
the one hand and of the Holder on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the Holder on the
other, and each party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, however,
that, in any such case (i) no Holder will be required to contribute any amount
in excess of the proceeds received by such Holder from the sale of Registrable
Securities pursuant to the Registration Statement; and (ii) no person or entity
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the Securities Act will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
2. Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Agreement that
the selling Holders will furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition and plan of distribution of such Registrable Securities as shall be
required to timely effect the registration of their Registrable Securities.
3. Injunctive and Other Relief. The Company and the Holders agree that in
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the event that either party breaches this Agreement, the non-breaching party
will be irreparably harmed and will be entitled to injunctive relief and
specific enforcement in addition to any other remedy which it may have at law or
in equity.
4. Entire Agreement; Modification. This Agreement sets forth the entire
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agreement and understanding between the parties hereto with respect to the
subject matter hereof, and merges and supersedes any and all prior discussions,
agreements, and understandings between or among them with respect thereto, and
no party shall be bound by any condition, definition, warranty or
representation, other than those expressly set forth or provided for in this
Agreement or in any document or instrument delivered pursuant to this Agreement,
or as may be set forth in writing and signed by the party or parties to be bound
thereby on or subsequent to the date hereof. This Agreement may not be changed
or modified, except by an agreement in writing executed by the Company and the
Holders.
5. Governing Law. This Agreement shall be governed by California law
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(excluding the choice of law provisions) and applicable federal law.
6. Severability. If any term, provision, covenant or restriction
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contained in this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, then the remainder of this Agreement shall
remain operative and in full force and effect. If any provision contained in
this Agreement is invalidated or becomes inoperative because of a change in law,
the parties hereto will use their reasonable best efforts to adopt an
appropriate substitute (if any) for such provision consistent with the intent of
the parties.
7. Binding Effect of Agreement. The terms of this Agreement shall be
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binding on and inure to the benefit of the parties hereto and their respective
subsidiaries, parents or other affiliated entities, agents, attorneys, heirs,
executors, successors, representatives and assigns. Any transferee of
Registrable Securities shall have the rights of a Holder hereunder.
8. Notices. Any notice, request or other communication required or
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permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
(a) If to the Investor:
Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Company:
Mirror Image Internet, Inc.
00 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Timo Aittola, Chief Financial Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
(c) If to Xcelera:
Xxxxxxx.xxx Inc.
X.X. Xxx 000
Xxxxxx House
South Church Street
Grand Cayman Islands, British West Indies
Attention: Xxxxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
00 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxx, President
Phone: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other address as the party in question may have furnished to the
other party by written notice given in accordance with this Section 8.
9. Counterparts. This Agreement may be executed in counterparts, each of
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which will be deemed an original, but all of which together will constitute one
and the same instrument.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Mirror Image Internet, Inc., Exodus Communications, Inc.,
a Delaware corporation a Delaware corporation
Name: /s/ Timo Aittola Name: /s/ Xxxxx X. Xxxxxxx
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By: Timo Aittola By: /s/ Xxxxx X. Xxxxxxx
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Title: Chief Financial Officer Title: President and Chief Executive
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Officer
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Xxxxxxx.xxx Inc.,
a Cayman Islands corporation
Name: /s/ Xxxxxxxxx X. Xxx
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By: Xxxxxxxxx X. Xxx
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Title: Chief Executive Officer
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[Signature Page to Registration Rights Agreement]
