Exhibit 10.27
CAYENTA, INC.
INVESTOR RIGHTS AGREEMENT
MARCH 30, 2000
CAYENTA, INC.
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as of
the 30th day of March 2000, by and among CAYENTA, INC., a Delaware corporation
(the "Company"), THE TITAN CORPORATION, a Delaware corporation ("Titan"), and
PENTON MEDIA, INC., an Ohio corporation ("Stockholder").
RECITALS
WHEREAS, the Company proposes to issue up to two hundred and fifty
thousand (250,000) shares of its Class A Common Stock to the Stockholder
pursuant to a Class A Common Stock Purchase Agreement by and among the Company
and the Stockholder (the "Stock Purchase Agreement"); and
WHEREAS, as a condition of entering into the Stock Purchase Agreement,
the Stockholder has requested that the Company and Titan extend to them certain
registration rights, co-sale rights and rights of first refusal on certain
issuances of equity securities of the Company, and certain other rights as set
forth below; and
WHEREAS, as a condition of entering into the Stock Purchase Agreement,
the Company and Titan have requested rights of first refusal on certain
transfers of the Cayenta Shares by the Stockholder and certain other rights as
set forth below.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties mutually agree as follows:
SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"AFFILIATE" of any person or entity means an person or entity
directly or indirectly controlling, controlled by, or under common control with
any such person or entity.
"CAYENTA SHARES" shall mean the Company's Class A Common Stock
issued pursuant to the Stock Purchase Agreement and held by the Stockholder and
its permitted assigns.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORM S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
1.
"HOLDER" means any person owning of record Registrable Securities
that have not been sold to the public or any assignee of record of such
Registrable Securities in accordance with Section 2.9 hereof.
"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Class A Common Stock registered under the
Securities Act.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means (a) the Cayenta Shares; and (b) any
Class A Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the Cayenta Shares. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferor's rights under Section 2 of this Agreement
are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be a number of
shares determined by calculating the total number of Cayenta Shares that are
then Registrable Securities and are then issued and outstanding.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 2.2 and 2.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale.
"TITAN SHARES" shall mean any shares of Class B Common Stock of the
Company held by Titan.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Cayenta Shares or Registrable Securities unless and until:
(i) It has complied with the requirements of Section 5 hereof;
2.
(ii) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement;
(iii) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a reasonably
detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such Cayenta Shares under
the Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144; or
(iv) Notwithstanding the provisions of paragraphs (i), (ii)
and (iii) above, Section 5 hereof shall not apply and no such registration
statement or opinion of counsel shall be necessary for a transfer by a Holder to
the Holder's immediate family member or trust, limited liability company,
partnership or other entity established for the benefit of an individual Holder
or the Holder's immediate family members, any Affiliate of a Holder or to a
Holder's employees provided that each such transferee is an accredited investor
as defined in Regulation D under the Securities Act; PROVIDED that in each case
the transferee will be subject to the terms of this Agreement to the same extent
as if he were an original Holder hereunder.
(b) Each certificate representing Cayenta Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel, if required, (which counsel may be counsel to
the Company) reasonably acceptable to the Company to the effect that the
securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
3.
(e) Notwithstanding anything to the contrary set forth herein, each
Holder agrees not to make any transfer or disposition of Cayenta Shares or
Registrable Securities to any third party, government or administrative agency
that in the reasonable judgment of Titan's board of directors could cause Titan
to be debarred or otherwise precluded from engaging in its government contracts
business. Any such attempted transfer or disposition shall be void and the
Company agrees that it will not effect such a transfer nor will it treat such a
transferee as the holder of such Cayenta Shares or Registrable Securities.
2.2 FORM S-3 REGISTRATION.
(a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of a majority of the
Registrable Securities then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Securities Act on Form S-3, then
the Company shall, within fifteen (15) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 2.2, use its best efforts to effect, as soon as practicable, such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other holders of the Company's registrable securities entitled to inclusion in
such registration joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from the
Company.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2(a). In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders (which underwriter or underwriters shall be reasonably
acceptable to the Company). Notwithstanding any other provision of this Section
2.2, if the underwriter advises the Company that marketing factors require a
limitation of the number of securities to be underwritten (including Registrable
Securities) then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of Registrable Securities that may be included in the underwriting shall be
allocated first, to the Holders and any other holders of the Company's
registrable securities entitled to inclusion in such registration on a PRO RATA
basis based on the number of registrable securities held by all such holders
(including the Initiating Holders); and second, to any shareholder of the
Company (other than to such holders) on a PRO RATA basis. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
the registration. If the Holders are unable to register and sell at least
seventy-five percent (75%) of the Registrable Securities requested by them to be
registered because of such underwriter's cutback, such registration statement
shall be withdrawn and the expenses of such withdrawn
4.
registration statement shall be borne by the Company in accordance with Section
2.4 hereof, and such registration shall not constitute a registration requested
under this Section 2.2.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:
(i) prior to the first anniversary of the registration
statement pertaining to the Initial Offering;
(ii) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders; provided however, that the Company
shall use all commercially reasonable efforts to become and remain eligible to
use Form S-3 (or any successor or similar form);
(iii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than four million dollars ($4,000,000); provided,
however, that the foregoing shall not apply if the Stockholder proposes to sell
all of its Registrable Securities pursuant to such registration at the market
price as quoted on any national securities exchange or pursuant to any
inter-dealer quotation system; provided further, that in the event the aggregate
price to the public is less than four million dollars ($4,000,000) due to the
underwriter's cutback provided for in Section 2.2(b) and the Company elects not
to effect such registration, then such registration shall not be counted as a
registration requested under this Section 2.2;
(iv) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance;
(v) after the Company has effected one (1) registration
pursuant to this Section 2.2, and such registration has been declared or ordered
effective; provided, however, that if such registration is underwritten and
Registrable Securities are not sold pursuant to such registration, such
registration shall not be counted as a registration requested under this Section
2.2
(vi) if within fifteen (15) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Company gives
notice to the Holders of the Company's intention to make a public offering
within ninety (90) days; or
(vii) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for a period
of not more than ninety (90) days after receipt of the request of the Initiating
Holders; PROVIDED that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period.
5.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least twenty (20) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding the registration statement related to the Initial
Offering and registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145 of the
Securities Act) and will afford each such Holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such Holder. Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within fifteen
(15) days after the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of disposition
of the Registrable Securities by such Holder. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
Notwithstanding anything set forth above, the registration rights set forth in
this Section 2.3 do not apply to the Company's Initial Offering.
(a) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of Registrable Securities
to be underwritten, the number of Registrable Securities that may be included in
the underwriting shall be allocated, first, to the Company; second, to the
Holders and any other holders of the Company's registrable securities entitled
to inclusion in such registration on a PRO RATA basis based on the total number
of Registrable Securities held by all such holders; and third, to any
shareholder of the Company (other than a Holder) on a PRO RATA basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. For any
Holder which is a partnership, limited liability company or corporation, the
partners, retired partners, members and shareholders of such Holder, or the
estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing person shall be deemed to be a
single "Holder", and any PRO RATA reduction with respect to such "Holder" shall
be based upon the aggregate amount of Cayenta Shares carrying registration
rights owned by all entities and individuals included in such "Holder," as
defined in this sentence.
6.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.4 hereof.
2.4 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 herein shall be borne by the Company. All Selling Expenses incurred
in connection with any registrations hereunder, shall be borne by the holders of
the securities so registered PRO RATA on the basis of the number of Registrable
Securities so registered. The Company shall not, however, be required to pay for
expenses of any registration proceeding begun pursuant to Section 2.2, the
request of which has been subsequently withdrawn by the Initiating Holders
unless (a) the withdrawal is based upon material adverse information concerning
the Company of which the Initiating Holders were not aware at the time of such
request, (b) the Holders of a majority of Registrable Securities agree to
forfeit their right to the one requested registration pursuant to Section 2.2,
in which event such right shall be forfeited by all Holders), or (c) the
registration is withdrawn in accordance with the last sentence of Section
2.2(b). If the Holders are required to pay the Registration Expenses, such
expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of
securities for which registration was requested. If the Company is required to
pay the Registration Expenses of a withdrawn offering pursuant to clause (a)
above, then the Holders shall not forfeit their rights under Section 2.2.
2.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities pursuant to Section 2.2, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto. The
Company shall not be required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a distribution of
securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in paragraph (a) above.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
7.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such 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.
(e) In the event of any underwritten public offering, 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.
(f) Notify each Holder of Registrable Securities covered by such
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 such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Use its best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (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, addressed to the underwriters, if any, and (ii)
a 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 addressed to the underwriters.
2.6 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect five
(5) years after the date of the consummation of the Initial Offering. In
addition, a Holder's registration rights shall expire if all Registrable
Securities held by and issuable to such Holder (and its affiliates, partners,
former partners, members and former members) may be immediately sold under Rule
144 during any ninety (90) day period.
2.7 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2 or 2.3 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 if, due to the operation of
subsection 2.2(b), the number of
8.
Registrable Securities or the anticipated aggregate offering price of the
Registrable Securities to be included in the registration does not equal or
exceed the number of Registrable Securities or the anticipated aggregate
offering price required to originally trigger the Company's obligation to
initiate such registration as specified in Section 2.2, and in such event, such
registration shall not be counted as a registration requested under Section 2.2.
2.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2 or 2.3:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, employees and directors of
each Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the indemnifying party of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the offering covered by such registration
statement; and the Company will pay as incurred to each such Holder, partner,
officer, employee, director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED HOWEVER,
that the indemnity agreement contained in this Section 2.8(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, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers and
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, employees,
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer or controlling person of such other Holder
may become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon
9.
any Violation by a Holder, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder under an instrument duly executed by such
Holder and stated to be specifically for use in connection with such
registration; and each such Holder will pay as incurred any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, officer, director
or controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 2.8(b) 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 Holder, which consent shall
not be unreasonably withheld; PROVIDED FURTHER, that in no event shall any
indemnity under this Section 2.8 exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses 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 to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.
(d) If the indemnification provided for in this Section 2.8 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; PROVIDED, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.
10.
(e) The obligations of the Company and Holders under this Section
2.8 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. 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 to such claim or litigation.
2.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of Registrable Securities which is a
Holder's family member or trust, limited liability company, partnership or other
entity established for the benefit of an individual Holder, any Affiliate of a
Holder or to a Holder's employees provided that each such transferee is an
accredited investor as defined in Regulation D under the Securities Act;
PROVIDED, HOWEVER, (i) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned and (ii) such transferee shall agree to
be subject to all restrictions set forth in this Agreement.
2.10 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.10 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 2, Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.
2.11 "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH INFORMATION.
Each Holder hereby agrees that such Holder shall not sell or otherwise transfer
or dispose of any Common Stock (or other securities) of the Company held by such
Holder (other than those included in the registration) for a period specified by
the representative of the underwriters of Common Stock (or other securities) of
the Company not to exceed one hundred eighty (180) days following the effective
date of the Initial Offering of the Company filed under the Securities Act;
provided, however, that each Holder shall agree to any market stand-off
agreement (not in excess of 90 days) proposed by any underwriter in connection
with a registration statement whereby Registrable Securities are offered for
sale pursuant to Section 2.3 hereof. Each Holder agrees to execute and deliver
such other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. In addition, if requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall provide, within ten (10) days of such request, such
information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company's
securities pursuant to a registration statement filed under the Securities Act.
The obligations described in this Section 2.11 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with
11.
respect to the Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period with
respect to the Initial Offering, or said ninety (90) day period with respect to
any other underwritten offering in connection with a registration statement
whereby Registrable Securities are offered for sale pursuant to Section 2.3
hereof.
2.12 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of 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 as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
SECTION 3. STOCKHOLDER CO-SALE RIGHTS
3.1
(a) If Titan proposes to sell or transfer any Titan Shares, then
Titan shall promptly give written notice (the "Notice") to the Company and to
the Stockholder at least 20 days prior to the closing of such sale or transfer.
The Notice shall describe in reasonable detail the proposed sale or transfer
including, without limitation, the number of Titan Shares to be sold or
transferred, the nature of such sale or transfer, the consideration to be paid,
and the name and address of each prospective purchaser or transferee. In the
event that the sale or transfer is being made pursuant to the provisions of
Section 3.2 hereof, the Notice shall state under which paragraph and
subparagraph the sale or transfer is being made.
(b) Stockholder shall have the right, exercisable upon written
notice to Titan within 15 days after receipt of the Notice, to participate in
such sale on the same terms and conditions specified in the Notice (each such
Stockholder a "Participant"). To the extent that the Stockholder exercises such
right of participation in accordance with the terms and conditions set forth
below, the number of Titan Shares that Titan may sell in the transaction shall
be correspondingly reduced.
(c) Stockholder may sell all or any part of that number of Cayenta
Shares equal to the product obtained by multiplying (i) the aggregate number of
Titan Shares covered by
12.
the Notice by (ii) a fraction, the numerator of which is the number of Cayenta
Shares owned by the Stockholder at the time of the sale or transfer and the
denominator of which is the total number of Titan shares and Cayenta Shares
owned by Titan and the Stockholder, respectively, at the time of the sale or
transfer.
(d) Each Participant shall effect its participation in the sale by
promptly delivering to Titan for transfer to the prospective purchaser one or
more certificates, properly endorsed for transfer, which represent the type and
number of Cayenta Shares which such Participant elects to sell.
(e) The stock certificate or certificates that the Participant
delivers to Titan pursuant to paragraph 3.1(d) shall be transferred to the
prospective purchaser in consummation of the sale of the Common Stock pursuant
to the terms and conditions specified in the Notice, and Titan shall
concurrently therewith remit to such Participant that portion of the sale
proceeds to which such Participant is entitled by reason of its participation in
such sale. To the extent that any prospective purchaser, or purchasers,
prohibits such assignment or otherwise refuses to purchase Cayenta Shares or
other securities from a Participant exercising its rights of co-sale hereunder,
Titan shall not sell to such prospective purchaser or purchasers any Titan
Shares unless and until, simultaneously with such sale, Titan shall purchase
such Cayenta Shares or other securities from such Participant.
(f) The exercise or non-exercise of the rights of the Participants
hereunder to participate in one or more sales of Titan Shares made by Titan
shall not adversely affect their rights to participate in subsequent sales of
Titan Shares subject to paragraph 3.1(a).
(g) If the Stockholder elects not to participate in the sale of
Titan Shares subject to the Notice, Titan may, not later than sixty (60) days
following delivery to the Company and the Stockholder of the Notice, enter into
an agreement providing for the closing of the transfer of the Titan Shares
covered by the Notice within thirty (30) days of such agreement on terms and
conditions not more favorable to the transferor than those described in the
Notice. Any proposed transfer on terms and conditions more favorable than those
described in the Notice, as well as any subsequent proposed transfer of any of
the Titan Shares by Titan, shall again be subject to the co-sale rights of the
Stockholder and shall require compliance by Titan with the procedures described
in this Section 3.1.
3.2 EXEMPT TRANSFERS
(a) Notwithstanding the foregoing, the provisions of Sections
3.1(b) through 3.1(g) shall not apply to (i) any pledge of Titan Shares made
pursuant to a bona fide loan transaction that creates a mere security interest,
including any security interest in existence on the date of this Agreement; or
(ii) any transfer of Titan Shares to an Affiliate of Titan; provided that (A)
Titan shall inform the Stockholder of such pledge or transfer prior to effecting
it and (B) the pledgee or transferee shall furnish the Stockholder with a
written agreement to be bound by and comply with all provisions of Section 3.
Such transferred Titan Shares shall remain "Titan Shares" hereunder, and such
pledgee or transferee shall be treated as "Titan" for purposes of this
Agreement.
13.
(b) Notwithstanding the foregoing, the provisions of Section 3
shall not apply to the sale of any Titan Shares (i) to the public pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"); (ii) to the Company, or (iii) if prior to such sale, Titan
held less than 5% of the Company's outstanding capital stock.
3.3 PROHIBITED TRANSFERS
(a) In the event Titan should sell any Titan Shares in
contravention of the co-sale rights of the Stockholder under this Agreement (a
"Prohibited Transfer"), Stockholder, in addition to such other remedies as may
be available at law, in equity or hereunder, shall have the put option provided
below, and Titan shall be bound by the applicable provisions of such option.
(b) In the event of a Prohibited Transfer, Stockholder shall have
the right to sell to Titan and require Titan to purchase the type and number of
Cayenta Shares equal to the number of Cayenta Shares the Stockholder would have
been entitled to transfer to the purchaser had the Prohibited Transfer under
Section 3(c) hereof been effected pursuant to and in compliance with the terms
hereof. Such sale shall be made on the following terms and conditions:
(i) The price per share at which the Cayenta Shares are to be
sold to Titan shall be equal to the price per share paid by the purchaser to
Titan in the Prohibited Transfer. Titan shall also reimburse the Stockholder for
any and all fees and expenses, including legal fees and expenses, incurred
pursuant to the exercise or the attempted exercise of the Stockholder's rights
under Section 3.
(ii) Within 90 days after the later of the dates on which the
Stockholder (A) received notice of the Prohibited Transfer or (B) otherwise
became aware of the Prohibited Transfer, the Stockholder shall, if exercising
the option created hereby, deliver to Titan the certificate or certificates
representing Cayenta Shares to be sold, each certificate to be properly endorsed
for transfer.
(iii) Titan shall, upon receipt of the certificate or
certificates for the Cayenta Shares to be sold by the Stockholder, pursuant to
this Section 3.3, pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in subparagraph 3.3(b)(i), in cash
or by other means acceptable to the Stockholder.
(iv) Notwithstanding the foregoing, any attempt by Titan to
transfer Titan Shares in violation of Section 3 hereof shall be void and the
Company agrees it will not effect such a transfer nor will it treat any alleged
transferee as the holder of such Titan Shares without the written consent of the
Stockholder.
3.4 LEGEND
(a) Each certificate representing Titan Shares now or hereafter
owned by Titan or issued to any person in connection with a transfer pursuant to
this Section 3 hereof shall be endorsed with the following legend:
14.
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND
BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS
OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
(b) Titan agrees that the Company may instruct its transfer agent
to impose transfer restrictions on the Titan Shares represented by certificates
bearing the legend referred to in Section 3.4(a) above to enforce the provisions
of this Agreement and the Company agrees to promptly do so. The legend shall be
removed when the rights under this Section 3 expire pursuant to the terms of
this Agreement.
SECTION 4. STOCKHOLDER RIGHTS OF FIRST REFUSAL
4.1 SUBSEQUENT OFFERINGS. Stockholder shall have a right of first
refusal to purchase its PRO RATA share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
4.6 hereof. Stockholder's PRO RATA share is equal to the ratio of (a) the number
of Cayenta Shares which Stockholder is deemed to be a holder immediately prior
to the issuance of such Equity Securities to (b) the total number of shares of
the Company's outstanding Common Stock (including all shares of Common Stock
issued or issuable upon exercise of any outstanding warrants or options)
immediately prior to the issuance of the Equity Securities. The term "Equity
Securities" shall mean (i) any Common Stock, Preferred Stock or other security
of the Company, (ii) any security convertible, with or without consideration,
into any Common Stock, Preferred Stock or other security (including any option
to purchase such a convertible security), (iii) any security carrying any
warrant or right to subscribe to or purchase any Common Stock, Preferred Stock
or other security or (iv) any such warrant or right.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give Stockholder written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Stockholder shall have fifteen
(15) days from the giving of such notice to agree to purchase its PRO RATA share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to the Stockholder who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the Stockholder
fails to exercise in full the rights of first refusal, the Company shall have
ninety (90) days thereafter to sell the Equity Securities in respect of which
the Stockholder's rights were not exercised, at a price and upon general terms
and conditions materially no more favorable to the purchasers thereof than
specified in the Company's notice to the Stockholder pursuant to Section 4.2
hereof. If the Company has not sold such Equity Securities within ninety (90)
days of the notice
15.
provided pursuant to Section 4.2, the Company shall not thereafter issue or sell
any Equity Securities, without first offering such securities to the Stockholder
in the manner provided above.
4.4 SALE WITHOUT NOTICE. In lieu of giving notice to the Stockholder
prior to the issuance of Equity Securities as provided in Section 4.2, the
Company may elect to give notice to the Stockholder within thirty (30) days
after the issuance of Equity Securities. Such notice shall describe the type,
price and terms of the Equity Securities. Stockholder shall have twenty (20)
days from the date of receipt of such notice to elect to purchase its PRO RATA
share of Equity Securities (as defined in Section 4.1, and calculated before
giving effect to the sale of the Equity Securities to the purchasers thereof).
The closing of such sale shall occur within sixty (60) days of the date of
notice to the Stockholder.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL; AMENDMENT. The rights of first
refusal of Stockholder under this Section 4 may be transferred to the same
parties, subject to the same restrictions as any transfer of registration rights
pursuant to Section 2.9. The rights of first refusal established by this Section
4 may be amended, or any provision waived with the written consent of the
Stockholder.
4.6 EXCLUDED SECURITIES. The rights of first refusal established by
this Section 4 shall have no application to any of the following Equity
Securities:
(a) shares of Class A Common Stock (and/or options, warrants or
other Class A Common Stock purchase rights issued pursuant to such options,
warrants or other rights) issued or to be issued to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary,
pursuant to stock purchase or stock option plans or other arrangements that are
approved by the Board of Directors;
(b) stock issued pursuant to any rights or agreements outstanding
as of the date of this Agreement, options and warrants outstanding as of the
date of this Agreement; and stock issued pursuant to any such rights or
agreements granted after the date of this Agreement; PROVIDED that the rights of
first refusal established by this Section 4 applied with respect to the initial
sale or grant by the Company of such rights or agreements;
(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) shares of Class A Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;
(e) any Equity Securities issued pursuant to any equipment leasing
arrangement, or debt financing from a bank or similar financial institution;
(f) any Equity Securities that are issued by the Company pursuant
to a registration statement filed under the Securities Act; and
(g) shares of the Company's Common Stock or Preferred Stock issued
in connection with strategic transactions involving the Company and other
entities, such as (i) joint ventures, manufacturing, marketing or distribution
arrangements or (ii) technology transfer,
16.
licensing or development arrangements; PROVIDED that such strategic transactions
and the issuance of shares therein, shall have been determined by the Company's
Board of Directors to be a strategic transaction for purposes of this
subsection.
SECTION 5. RIGHTS OF FIRST AND SECOND REFUSAL ON SALE OF CAYENTA SHARES
5.1 SALE OF CAYENTA SHARES. The Company shall have a right of first
refusal to purchase any Cayenta Shares that Stockholder (or a permitted
assignee) proposes to sell or transfer to any third party after the date of this
Agreement. Titan shall have a right of second refusal to purchase any Cayenta
Shares that Stockholder (or a permitted assignee) proposes to sell to any third
party after the date of this Agreement.
5.2 EXERCISE OF RIGHT OF FIRST REFUSAL. If Stockholder proposes to sell
or transfer any Cayenta Shares, Stockholder shall give the Company written
notice of its intention, describing the price and the terms and conditions upon
which Stockholder proposes to sell or transfer the same. The Company shall have
fifteen (15) days from the giving of such notice to agree to purchase any or all
of such Cayenta Shares for the price and upon the terms and conditions specified
in the notice by giving written notice to Stockholder and stating therein the
quantity of such Cayenta Shares to be purchased.
5.3 EXERCISE OF RIGHT OF SECOND REFUSAL. If the Company does not
exercise its right of first refusal to purchase all such Cayenta Shares, the
Stockholder shall give Titan written notice of its intention to sell all
remaining Cayenta Shares it desires to sell for the price and on the terms and
conditions upon which such Stockholder set forth in the notice to the Company
delivered pursuant to Section 5.2. Titan shall have fifteen (15) days from the
giving of such notice to agree to purchase such remaining Cayenta Shares for the
price and upon the terms and conditions specified in the notice by giving
written notice to such Stockholder and stating therein the quantity of such
Cayenta Shares to be purchased.
5.4 SALE OF CAYENTA SHARES TO OTHER PERSONS. If the Company fails to
exercise its right of first refusal in full and if Titan fails to exercise its
right of second refusal in full, the Stockholder shall have ninety (90) days
from the notice delivered to Titan pursuant to Section 5.3 to sell or transfer
such Cayenta Shares in respect of which the Company's or Titan's rights were not
exercised, at a price and upon general terms and conditions materially no more
favorable to the purchasers thereof than specified in the Stockholder's notices
delivered pursuant to Section 5.2 hereof and Section 5.3 hereof. If the
Stockholder has not sold such Cayenta Shares within ninety (90) days of the
notice provided pursuant to Section 5.3, the Stockholder shall not thereafter
sell or transfer any Cayenta Shares, without first offering such securities to
the Company and Titan in the manner provided above.
5.5 TRANSFER OF RIGHTS OF FIRST REFUSAL; AMENDMENT. The right of first
refusal of the Company and the right of second refusal of Titan under this
Section 5 may be transferred to affiliates of the Company by the Company and
affiliates of Titan by Titan. The rights of first refusal established by this
Section 5 may be amended, or any provision waived with the written consent of
the Company and Titan.
17.
5.6 EXEMPT TRANSFER. Notwithstanding anything to the contrary herein,
Stockholder may transfer any part or all of its Cayenta Shares to a member of
such Stockholder's immediate family or a trust, limited liability company,
partnership or other entity established for the benefit of such Stockholder or
any Affiliate of Stockholder or an immediate family member of such Stockholder
or to an employee of Stockholder provided that each such transferee is an
accredited investor as defined in Regulation D under the Securities Act;
PROVIDED, HOWEVER, (i) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and (ii) such transferee shall agree to be subject to all
restrictions set forth in this Agreement.
5.7 LEGEND
(a) Each certificate representing Cayenta Shares now or hereafter
owned by any Stockholder or issued to any person in connection with a transfer
pursuant to this Section 5 hereof shall be endorsed with the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND
BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS
OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
(b) Stockholder agrees that the Company may instruct its transfer
agent to impose transfer restrictions on the Cayenta Shares represented by
certificates bearing the legend referred to in Section 5.7(a) above to enforce
the provisions of this Agreement and the Company agrees to promptly do so. The
legend shall be removed when the rights under this Section 5 expire pursuant to
the terms of this Agreement.
SECTION 6. TERMINATION OF RIGHTS
The rights set forth in Sections 3, 4 and 5 of this Agreement shall not
apply to, and shall terminate upon the earlier of (i) the effective date of the
registration statement pertaining to the Initial Offering or (ii) (A) a sale,
lease or other disposition of all or substantially all of the assets of the
Company, (B) a merger or consolidation in which the Company is not the surviving
corporation or (C) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise. The registration rights set forth in
Section 2 of this Agreement shall terminate in accordance with Section 2.6
hereof, and the Company agrees to promptly remove any legends related to the
rights set forth in Sections 3, 4 and 5 hereof from all applicable stock
certificates.
SECTION 7. MISCELLANEOUS
18.
7.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
7.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities or Titan Shares from time
to time; PROVIDED, HOWEVER, that prior to the receipt by the Company of adequate
written notice of the transfer of any Registrable Securities specifying the full
name and address of the transferee, the Company may deem and treat the person
listed as the holder of such Registrable Securities in its records as the
absolute owner and holder of such Registrable Securities for all purposes,
including the payment of dividends or any redemption price.
7.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, the Stock
Purchase Agreement and the other documents delivered pursuant thereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
7.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
7.6 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company, Titan and the
Stockholder.
(b) Except as otherwise expressly provided, the obligations of the
Company and Titan and the rights of the Holders under this Agreement may be
waived only with the written consent of the Stockholder.
7.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any party hereto upon any
breach, default or noncompliance of the any other party under this Agreement
shall impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent, or approval of
any kind or character on any party's part of any breach, default or
noncompliance under the Agreement or any waiver on such party's part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only
19.
to the extent specifically set forth in such writing. All remedies, either under
this Agreement, by law, or otherwise afforded to any party hereto, shall be
cumulative and not alternative.
7.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the party
to be notified at the address as set forth on the signature pages hereof or
Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
7.9 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
7.10 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
7.11 COUNTERPARTS. This Agreement may be executed by facsimile and in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
20.
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR
RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY:
CAYENTA, INC.
By:/s/ Xxxxxx X. Lake
---------------------------------------
Xxxxxx X. Lake, Chief Financial Officer
THE TITAN CORPORATION
By:/s/ Xxxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxxx X. Xxxxxxxx
STOCKHOLDER:
PENTON MEDIA, INC.
By:/s/ Xxxxxx X. XxXxxxxx
--------------------------------------
Xxxxxx X. XxXxxxxx
--------------------------------------
Its: Chief Financial Officer
--------------------------------------
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL...............................................................................................1
1.1 Definitions.....................................................................................1
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER................................................................2
2.1 Restrictions on Transfer........................................................................2
2.2 Form S-3 Registration...........................................................................4
2.3 Piggyback Registrations.........................................................................6
2.4 Expenses of Registration........................................................................7
2.5 Obligations of the Company......................................................................7
2.6 Termination of Registration Rights..............................................................8
2.7 Delay of Registration; Furnishing Information...................................................8
2.8 Indemnification.................................................................................9
2.9 Assignment of Registration Rights..............................................................11
2.10 Amendment of Registration Rights...............................................................11
2.11 "Market Stand-Off" Agreement; Agreement to Furnish Information.................................11
2.12 Rule 144 Reporting.............................................................................12
SECTION 3. STOCKHOLDER CO-SALE RIGHTS...........................................................................12
3.2 Exempt Transfers...............................................................................13
3.3 Prohibited Transfers...........................................................................14
3.4 Legend.........................................................................................14
SECTION 4. STOCKHOLDER RIGHTS OF FIRST REFUSAL..................................................................15
4.1 Subsequent Offerings...........................................................................15
4.2 Exercise of Rights.............................................................................15
4.3 Issuance of Equity Securities to Other Persons.................................................15
4.4 Sale Without Notice............................................................................16
4.5 Transfer of Rights of First Refusal; Amendment.................................................16
4.6 Excluded Securities............................................................................16
SECTION 5. RIGHTS OF FIRST AND SECOND REFUSAL ON SALE OF CAYENTA SHARES.........................................17
5.1 Sale of Cayenta Shares.........................................................................17
5.2 Exercise of Right of First Refusal.............................................................17
i
TABLE OF CONTENTS
(CONTINUED)
5.3 Exercise of Right of Second Refusal............................................................17
5.4 Sale of Cayenta Shares to Other Persons........................................................17
5.5 Transfer of Rights of First Refusal; Amendment.................................................17
5.6 Exempt Transfer................................................................................17
5.7 Legend.........................................................................................18
SECTION 6. TERMINATION OF RIGHTS................................................................................18
SECTION 7. MISCELLANEOUS........................................................................................18
7.1 Governing Law..................................................................................18
7.2 Survival.......................................................................................18
7.3 Successors and Assigns.........................................................................19
7.4 Entire Agreement...............................................................................19
7.5 Severability...................................................................................19
7.6 Amendment and Waiver...........................................................................19
7.7 Delays or Omissions............................................................................19
7.8 Notices........................................................................................19
7.9 Attorneys' Fees................................................................................20
7.10 Titles and Subtitles...........................................................................20
7.11 Counterparts...................................................................................20
ii
INVESTOR RIGHTS AGREEMENT
A-1
