1
Exhibit 10.4
QUANTUM BRIDGE COMMUNICATIONS, INC.
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
April 10, 2000
To each of the several persons and entities
named in the signature pages of this Second
Amended and Restated Registration Rights
Agreement
Dear Ladies and Gentlemen:
Pursuant to an Amended and Restated Registration Rights Agreement dated as
of August 18, 1999 and amended as of November 30, 1999 (the "OLD REGISTRATION
RIGHTS AGREEMENT"), by and among Quantum Bridge Communications, Inc., a Delaware
corporation (the "COMPANY") and the investors listed in the signature pages
thereto, the Company granted certain registration rights to the holders of the
Company's (a) Series A Convertible Preferred Stock, par value $.001 per share
(the "SERIES A PREFERRED STOCK") and (b) Series B Convertible Preferred Stock,
par value $.001 per share (the "SERIES B PREFERRED STOCK"). In order to attract
additional investment in the Company, pursuant to this Second Amended and
Restated Registration Rights Agreement (this "AGREEMENT"), the Company is
granting registration rights to the purchasers of the Company's Series C
Convertible Preferred Stock, par value $.001 per share (the "SERIES C PREFERRED
STOCK" and together with the Series A Preferred Stock and Series B Preferred
Stock, the "PREFERRED STOCK"), and to the holders of Series A Preferred Stock
and Series B Preferred Stock. In addition, the Company intends that, upon
execution of this Agreement, the registration rights provisions of the Old
Registration Rights Agreement shall be terminated and superseded in their
entirety by this Agreement. The Company covenants and agrees with each of you as
follows:
1. TERMINATION OF OLD REGISTRATION RIGHTS PROVISIONS. The Old
Registration Rights Agreement is hereby terminated in its entirety.
2. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the Common Stock, $.001 par value, of the
Company, as constituted as of the date of this Agreement.
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"CONVERSION SHARES" shall mean shares of Common Stock issued upon
conversion of the Preferred Shares.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"PREFERRED SHARES" shall mean the shares of Preferred Stock now owned
or hereafter acquired by the parties executing this Agreement.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 9.
"RESTRICTED STOCK" shall mean the Conversion Shares, excluding
Conversion Shares (i) which have been (a) registered under the Securities Act
pursuant to an effective registration statement filed thereunder and disposed of
in accordance with the registration statement covering them or (b) publicly sold
pursuant to Rule 144 under the Securities Act or (ii) which may be sold pursuant
to Rule 144(k) (or its successor) under the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 9.
3. RESTRICTIVE LEGEND. Each certificate representing Preferred Shares or
Conversion Shares shall, except as otherwise provided in this Section 3 or in
Section 4, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND
ALL SUCH APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that both Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP shall be
satisfactory) the securities represented thereby may be publicly sold pursuant
to Rule 144(k) under the Securities Act.
4. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of any
Preferred Shares or Conversion Shares (other than under the circumstances
described in Sections 5, 6 or 7), the holder thereof shall give written notice
to the Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel satisfactory to the Company (it
being agreed that both Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP and Skadden, Arps, Slate,
Xxxxxxx & Xxxx
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LLP shall be satisfactory) to the effect that the proposed transfer may be
effected without registration under the Securities Act and any applicable state
securities laws, whereupon the holder of such stock shall be entitled to
transfer such stock in accordance with the terms of its notice; PROVIDED,
HOWEVER, that no such opinion of counsel shall be required for a transfer to one
or more partners or members of the transferor (in the case of a transferor that
is a partnership or a limited liability company, respectively) or to an
affiliated corporation (in the case of a transferor that is a corporation). Each
certificate for Preferred Shares or Conversion Shares transferred as above
provided shall bear the legend set forth in Section 3, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities pursuant to Rule 144(k) in a public sale without
registration under the Securities Act. The restrictions provided for in this
Section 4 shall not apply to securities which are not required to bear the
legend prescribed by Section 3 in accordance with the provisions of that
Section.
5. REQUIRED REGISTRATION.
(a) At any time after the earliest of (i) six months after any
registration statement covering a public offering of securities of the Company
under the Securities Act shall have become effective, (ii) six months after the
Company shall have become a reporting company under Section 12 of the Exchange
Act, and (iii) the third anniversary of the date of this Agreement, the holders
of Restricted Stock constituting at least 40% of the total shares of Restricted
Stock then outstanding may request the Company to register under the Securities
Act all or any portion of the shares of Restricted Stock held by such requesting
holder or holders for sale in the manner specified in such notice, PROVIDED that
the shares of Restricted Stock for which registration has been requested shall
constitute at least 20% of the total shares of Restricted Stock originally
issued if such holder or holders shall request the registration of less than all
shares of Restricted Stock then held by such holder or holders (or any lesser
percentage if the reasonably anticipated aggregate price to the public of such
public offering would exceed $5,000,000). For purposes of this Section 5 and
Sections 6, 7, 14(a) and 14(d), the term "Restricted Stock" shall be deemed to
include the number of shares of Restricted Stock which would be issuable to a
holder of Preferred Shares upon conversion of all Preferred Shares held by such
holder at such time, PROVIDED, HOWEVER, that the only securities which the
Company shall be required to register pursuant hereto shall be shares of Common
Stock, and PROVIDED, FURTHER, HOWEVER, that, in any underwritten public offering
contemplated by this Section 5 or Sections 6 and 7, the holders of Preferred
Shares shall be entitled to sell such Preferred Shares to the underwriters for
conversion and sale of the shares of Common Stock issued upon conversion
thereof. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 5 within 6 months after the effective date of a
registration statement filed by the Company covering an underwritten public
offering in which the holders of Restricted Stock shall have been entitled to
join pursuant to Sections 6 or 7 and in which there shall have been effectively
registered all shares of Restricted Stock as to which registration shall have
been requested.
(b) Following receipt of any notice under this Section 5, the Company
shall promptly notify all holders of Restricted Stock from whom notice has not
been received and
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shall use its reasonable best efforts to register under the Securities Act, for
public sale in accordance with the method of disposition specified in such
notice from requesting holders, the number of shares of Restricted Stock
specified in such notice (and in all notices received by the Company from other
holders within 30 days after the giving of such notice by the Company). If such
method of disposition shall be an underwritten public offering, the holders of a
majority of the shares of Restricted Stock to be sold in such offering may
designate the managing underwriter of such offering, subject to the approval of
the Company, which approval shall not be unreasonably withheld or delayed. The
Company shall be obligated to register Restricted Stock pursuant to this Section
5 on two occasions only, PROVIDED, HOWEVER, that such obligation shall be deemed
satisfied only when a registration statement covering all shares of Restricted
Stock specified in notices received as aforesaid (unless voluntarily reduced by
the requesting holders), for sale in accordance with the method of disposition
specified by the requesting holders, shall have become effective and, if such
method of disposition is a firm commitment underwritten public offering, all
such shares shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 5, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. Following an initial public
offering, except for registration statements on Form S-4, or Form S-8 (or their
successors), the Company will not file with the Commission any other
registration statement with respect to its Common Stock, whether for its own
account or that of other stockholders, from the date of receipt of a notice from
requesting holders pursuant to this Section 5 until the completion of the period
of distribution of the registration contemplated thereby.
6. INCIDENTAL REGISTRATION. If the Company at any time (other than
pursuant to Section 5 or Section 7) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Form S-4 or Form S-8 (or their successors) or another
form not available for registering the Restricted Stock for sale to the public
or any registration statement covering only securities issued or proposed to be
issued in exchange for securities or assets of another corporation), each such
time it will give written notice to all holders of outstanding Restricted Stock
of its intention so to do. Upon the written request of any such holder, received
by the Company within 20 days after the giving of any such notice by the
Company, to register any of its Restricted Stock, the Company will use its best
efforts to cause the Restricted Stock as to which registration shall have been
so requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder of such Restricted Stock so
registered. In the event that any registration pursuant to this Section 6 shall
be, in whole or in part, an underwritten public offering of Common Stock, the
number of shares of Restricted Stock to be included in such an underwriting may
be reduced (pro rata among the requesting holders based upon the number of
shares of Restricted Stock owned by such holders) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein,
PROVIDED, HOWEVER, that such number of shares of Restricted Stock shall not be
reduced if any shares are to be included in such
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underwriting for the account of any person other than the Company, requesting
holders of Restricted Stock or other holders of capital stock of the Company
with contractual registration rights. Notwithstanding the foregoing provisions,
the Company may withdraw any registration statement referred to in this Section
6 without thereby incurring any liability to the holders of Restricted Stock.
7. REGISTRATION ON FORM S-3. If at any time (i) a holder or holders of
Preferred Shares or Restricted Stock request that the Company file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the shares of Restricted Stock held by such
requesting holder or holders, the reasonably anticipated aggregate price to the
public of which would exceed $1,000,000, and (ii) the Company is a registrant
entitled to use Form S-3 or any successor thereto to register such shares, then
the Company shall use its reasonable best efforts to register under the
Securities Act on Form S-3 or any successor thereto, for public sale in
accordance with the method of disposition specified in such notice, the number
of shares of Restricted Stock specified in such notice. Whenever the Company is
required by this Section 7 to use its best efforts to effect the registration of
Restricted Stock, each of the procedures and requirements of Section 5
(including but not limited to the requirement that the Company notify all
holders of Restricted Stock from whom notice has not been received and provide
them with the opportunity to participate in the offering) shall apply to such
registration, PROVIDED, HOWEVER, that there shall be no limitation on the number
of registrations on Form S-3 which may be requested and obtained under this
Section 7 (except that no more than two such registrations may be requested in
any twelve-month period), and PROVIDED, FURTHER, HOWEVER, that the requirements
contained in the first sentence of Section 5(a) shall not apply to any
registration on Form S-3 which may be requested and obtained under this
Section 7.
8. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Sections 5, 6 or 7 to use its reasonable best efforts to
effect the registration of any shares of Restricted Stock under the Securities
Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 5,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its reasonable best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including
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each preliminary prospectus) as such persons reasonably may request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such registration statement;
(d) use its reasonable best efforts to register or qualify the
Restricted Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as the sellers of Restricted Stock or, in
the case of an underwritten public offering, the managing underwriter reasonably
shall request, PROVIDED, HOWEVER, that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
(e) use its reasonable best efforts to list the Restricted Stock
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;
(f) promptly notify each seller of Restricted Stock and each
underwriter under 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 of which the Company has knowledge as a result of which
the prospectus contained 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 light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any seller
of Restricted Stock, use its reasonable best efforts to furnish on the date that
Restricted Stock is delivered to the underwriters for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the underwriters, stating
that such registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements contained therein) and (C) to such other effects as
reasonably may be requested by counsel for the underwriters and (ii) a letter
dated such date from the independent public accountants retained by the Company,
addressed to the underwriters, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all pertinent financial
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and other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement.
For purposes of Section 8(a) and 8(b) and of Section 5(c), the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby and 120 days
after the effective date thereof.
In connection with each registration hereunder, the sellers of Restricted
Stock will furnish to the Company in writing such information with respect to
themselves and the proposed distribution by them as reasonably shall be
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 5, 6 or 7
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature;
provided, that, with respect to any holdback agreement, all officers and
directors of the Company, all holders of at least 3% of the Company's equity
securities purchased from the Company (other than securities purchased from the
Company at any time after the date of this Agreement in a registered public
offering) and all other persons with registration rights (whether or not
pursuant to this Agreement) are bound by and have entered into a similar
agreement and the restrictions on transfer have not been waived with respect to
any such officers, directors, holders or persons; provided, further, that with
respect to any underwriting agreement or arrangement, the liability of a seller
shall be limited to such seller's net proceeds received from such registration
and such limitation shall not be amended by such underwriting agreement or
arrangement.
9. EXPENSES. All expenses incurred by the Company in complying with
Sections 5, 6 and 7, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance obtained by the
Company and reasonable fees and disbursements (not to exceed $25,000) of one
counsel for the sellers of Restricted Stock, but excluding any Selling Expenses,
are called "Registration Expenses". All underwriting discounts and selling
commissions applicable to the sale of Restricted Stock are called "Selling
Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 5, 6 or 7. All Selling Expenses in
connection with each registration statement under Sections 5, 6 or 7 shall be
borne by the participating sellers in proportion to the number of shares sold by
each, or by such participating sellers other than the Company (except
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to the extent the Company shall be a seller) as they may agree. Notwithstanding
the above, if a registration under Section 5 is withdrawn at the request of the
requesting sellers (other than as a result of information concerning the
business or financial condition of the Company which is made known to the
sellers after the date on which such registration was requested) and if the
requesting sellers elect not to have such registration counted as a registration
requested under Section 5, the requesting sellers shall pay the Registration
Expenses of such registration.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 5, 6 or 7, the Company will
indemnify and hold harmless each seller of such Restricted Stock thereunder,
each underwriter of such Restricted Stock thereunder and each other person, if
any, who controls such seller or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Sections 5, 6 or 7, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon 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, and will reimburse each
such seller, each such underwriter and each such 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 Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by any such
seller, any such underwriter or any such controlling person in writing
specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 5, 6 or 7, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 5, 6 or 7, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon 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, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or
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other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, PROVIDED, HOWEVER,
that such seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
such seller, as such, furnished in writing to the Company by such seller
specifically for use in such registration statement or prospectus, and PROVIDED,
FURTHER, HOWEVER, that the liability of each seller hereunder shall be limited
to the proportion of any such loss, claim, damage, liability or expense which is
equal to the proportion that the public offering price of the shares sold by
such seller under such registration statement bears to the total public offering
price of all securities sold thereunder, but not in any event to exceed the net
proceeds received by such seller from the sale of Restricted Stock covered by
such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 10 and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 10 if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 10 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, PROVIDED,
HOWEVER, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 10 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 the fact that this Section 10 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
10; then, and in each such case, the Company and such holder will contribute to
the
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aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such holder is
responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; PROVIDED, HOWEVER, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) 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.
11. CHANGES IN COMMON STOCK OR PREFERRED STOCK. If, and as often as, there
is any change in the Common Stock or the Preferred Stock by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the rights
and privileges granted hereby shall continue with respect to the Common Stock or
the Preferred Stock as so changed.
12. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, at all times
after 90 days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock without
registration.
13. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to you as follows:
(a) The execution and delivery of this Agreement by the Company have
been duly authorized by all requisite corporate action and does not violate any
provision of law, any order of any court or other agency of government, the
Charter or By-laws of the Company or any provision of any indenture, agreement
or other instrument to which it or any or its properties or assets is bound,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument
or result in the
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creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
14. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including without
limitation transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not, PROVIDED, HOWEVER, that registration rights conferred herein
on the holders of Preferred Shares or Restricted Stock shall only inure to the
benefit of a transferee of Preferred Shares or Restricted Stock if (i) there is
transferred to such transferee at least 20% of the total shares of Restricted
Stock (but not less than 50,000 shares) originally issued pursuant to the Series
A Convertible Preferred Stock Purchase Agreement, dated as of November 18, 1998
and amended on January 20, 1999 and March 15, 1999, the Series B Convertible
Preferred Stock Purchase Agreement, dated as of August 18, 1999 and amended on
November 30, 1999 or the Series C Convertible Preferred Stock Purchase
Agreement, dated as of the date hereof (the "Purchase Agreements") to the direct
or indirect transferor of such transferee or (ii) such transferee is a partner,
shareholder, affiliate or venture capital fund which is managed by the same
investment manager of a party hereto.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by telecopier or
telex, addressed as follows:
if to the Company or any other party hereto, at the address of such
party set forth in the Purchase Agreements with copies as provided therein;
if to any subsequent holder of Preferred Shares or Restricted Stock,
to it at such address as may have been furnished to the Company in writing
by such holder;
in any case, at such other address or addresses as shall have been furnished in
writing to the Company (in the case of a holder of Preferred Shares or
Restricted Stock) or to the holders of Preferred Shares or Restricted Stock (in
the case of the Company) in accordance with the provisions of this paragraph.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding shares of Restricted Stock. This
Agreement has been agreed to and accepted by the holders of at least two-thirds
of the Series A Preferred Stock and the Series B Preferred Stock.
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(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock under Sections 5, 6 or 7 shall terminate on the fifteenth anniversary of
the date of this Agreement or, if earlier, three years after an initial public
offering.
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to, or subject to, this Agreement shall agree
not to sell publicly any shares of Restricted Stock or any other shares of
Common Stock (other than shares of Restricted Stock or other shares of Common
Stock being registered in such offering), without the consent of such
underwriters, for a period of not more than 180 days following the effective
date of the registration statement relating to such offering; PROVIDED, HOWEVER,
that all other persons selling shares of Common Stock in such offering, all
persons holding in excess of 5% of the capital stock of the Company on a fully
diluted basis and all executive officers and directors of the Company shall also
have agreed not to sell publicly their Common Stock under the circumstances and
pursuant to the terms set forth in this Section 14(g).
(h) Notwithstanding the provisions of Section 8(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed 90 days in any 12-month period if there exists at the time material
non-public information relating to the Company which, in the reasonable opinion
of the Company, should not be disclosed.
(i) The Company shall not grant to any third party any registration
rights more favorable than or inconsistent with any of those contained herein,
so long as any of the registration rights under this Agreement remains in
effect.
(j) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(k) Any person receiving any written notice from the Company
regarding the Company's plans to file a registration statement shall treat such
notice confidentially and shall not disclose such information to any person
other than as necessary to exercise its rights under this Agreement.
15. ADDITIONAL PURCHASERS. Persons or entities that, after the date
hereof, purchase shares of Series C Preferred Stock pursuant to the Series C
Convertible Preferred Stock Purchase Agreement dated as of the date hereof, and
become "Additional Purchasers" thereunder may, with the prior written approval
of the Company (but without the need for approval by any other party to this
Agreement), become parties to this Agreement by executing and delivering a
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counterpart signature page hereto, whereupon they shall be deemed "Purchasers"
for all purposes of this Agreement.
[Remainder of page intentionally left blank]
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Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this Agreement shall be a
binding agreement between the Company and you.
Very truly yours,
QUANTUM BRIDGE COMMUNICATIONS, INC.
By: /s/ Xxxxxxx Xxxx
----------------------------------
Title: President & CEO
--------------------------------
AGREED TO AND ACCEPTED as of the date first
above written.
HOLDERS OF AT LEAST TWO-THIRDS OF SERIES A
PREFERRED STOCK:
NEW ENTERPRISE ASSOCIATES VIII, LIMITED
PARTNERSHIP
By: NEA Partners VIII, Limited Partnership
General Partner
By: /s/ Xxxxx Xxxxxx
----------------------------
General Partner
NEA PRESIDENTS' FUND, L.P.
By: NEA General Partners, L.P.
General Partner
By: /s/ Xxxxx Xxxxxx
----------------------------
General Partner
NEA Ventures 1998, L.P.
By: /s/ Xxxxx Xxxxxx
----------------------------
General Partner
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LAZARD TECHNOLOGY PARTNERS, L.P.
By: Xxxxxxx X. Xxxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Title: Managing Principal
------------------------------
LAZARD TECHNOLOGY PARTNERS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Member
LAZARD TECHNOLOGY INVESTORS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Member
/s/ Xxxx X. Xxxxx
---------------------------------------------
Xxxx X. Xxxxx
---------------------------------------------
Xxxxxxx Xxxxxx King
/s/ Xxxxxxx Xxxx
---------------------------------------------
Xxxxxxx Xxxx
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HOLDERS OF AT LEAST TWO-THIRDS OF SERIES B
PREFERRED STOCK:
ATLAS VENTURE FUND IV, L.P.
By: Atlas Venture Associates IV, L.P.
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------
Vice President
ATLAS VENTURE PARALLEL FUND IV-A C.V.
By: Atlas Venture Associates IV, L.P.
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------
Vice President
ATLAS VENTURE PARALLEL FUND IV-B C.V.
By: Atlas Venture Associates IV, L.P.
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------
Vice President
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ATLAS VENTURE ENTREPRENEURS' FUND IV, L.P.
By: Atlas Venture Associates IV, L.P.
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------
Vice President
NEW ENTERPRISE ASSOCIATES VIII, LIMITED PARTNERSHIP
By: NEA Partners VIII, Limited Partnership
General Partner
By: /s/ Xxxxx Xxxxxx
----------------------------------
General Partner
NEA PRESIDENTS' FUND
By: NEA General Partners, L:P.
General Partner
By: /s/ Xxxxx Xxxxxx
----------------------------------
General Partner
LAZARD TECHNOLOGY PARTNERS, L.P.
By:
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Title: Managing Principal
----------------------------------
LAZARD TECHNOLOGY PARTNERS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Title: Managing Principal
----------------------------------
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LAZARD TECHNOLOGY INVESTORS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Title: Managing Principal
----------------------------------
/s/ Xxxx X. Xxxxx
-----------------------------------------------
Xxxx X. Xxxxx
HOLDERS OF SERIES C PREFERRED STOCK:
PURCHASERS:
TPG-QB, LLC
By: TPG Partners III, L.P.
By: TPG GenPar III, L.P.
By: TPG Advisors III, Inc.
By: /s/ Illegible
----------------------------------
Title: Vice President
----------------------------------
CAPITAL PARTNERS IV TECHNOLOGY HOLDINGS, L.P.
By: MSDW Capital Partners IV, LLC
as General Partner
By: MSDW Capital Partners IV, Inc.
as Member
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Title: Managing Director
----------------------------------
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PEQUOT PRIVATE EQUITY FUND II, L.P.
By: Pequot Capital Management, Inc.
its investment manager
/s/ Xxxxx X. Xxxxx
-----------------------------------
By: Xxxxx X. Xxxxx
Chief Financial Officer
BCI GROWTH V, L.P.
By: Glenpointe Associates V, LLC
General Partner
/s/ Xxxxxxx X. Xxxx
-----------------------------------
By: Xxxxxxx X. Xxxx
Managing Member
BCI INVESTORS, LLC
/s/ Xxxxxxx X. Xxxx
-----------------------------------
By: Xxxxxxx X. Xxxx
Managing Member
COMCAST INTERACTIVE CAPITAL, LP
By: CIC Partners, LP
its general partner
By: CIC Venture Management, LLC
its general partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
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KMC INVESTMENT PARTNERS, L.P.
By: Nassau Capital L.L.C.
Its General Partner
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Title: Member
-----------------------------------
FSC CORP.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Director
-----------------------------------
DRW VENTURE PARTNERS LP
By: Xxxx Xxxxxxxx Corporation
Its: General Partner
By: /s/ Xxxx Xxxxxx
-----------------------------------
Its: Director, DRW Finance and
Administration
-----------------------------------
ATLAS VENTURE FUND IV, L.P.
By: Atlas Venture Associates IV, LLP
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------------
Vice President
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ATLAS VENTURE PARALLEL FUND IV-A, C.V.
By: Atlas Venture Associates IV, LLP
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------------
Vice President
ATLAS VENTURE PARALLEL FUND IV-B, C.V.
By: Atlas Venture Associates IV, LLP
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------------
Vice President
ATLAS VENTURE ENTREPRENEURS' FUND IV, L.P.
By: Atlas Venture Associates IV, LLP
its general partner
By: Atlas Venture Associates IV, Inc.
its general partner
/s/ Xxxxxx Xxxxxx Xxxxx
---------------------------------------------------
Vice President
NEW ENTERPRISE ASSOCIATES VIII, LIMITED PARTNERSHIP
By: NEA Partners VIII, Limited Partnership
General Partner
By: /s/ Xxxxx Xxxxxx
---------------------------------------
General Partner
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LAZARD TECHNOLOGY PARTNERS, L.P.
By:
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Managing Principal
-----------------------------------
LAZARD TECHNOLOGY PARTNERS, L.L.C.
By:
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Managing Principal
-----------------------------------
LAZARD TECHNOLOGY INVESTORS, L.L.C.
By:
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Managing Principal
-----------------------------------
/s/ Xxxx X. Xxxxx
--------------------------------------------------
Xxxx X. Xxxxx
X.X. XXXXXX CAPITAL CORPORATION
/s/ Xxxx Xxxxxxxxxx
-----------------------------------
By: Xxxx Xxxxxxxxxx
Title: Vice President
SIXTY WALL STREET FUND, L.P.
/s/ Xxxx Xxxxxxxxxx
-----------------------------------
By: Xxxx Xxxxxxxxxx
Title: Vice President
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FIRST UNION CAPITAL PARTNERS LLC
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
----------------------------------
YALE QUANTUM INVESTMENTS LP
By: /s/ Illegible
----------------------------------
Title: Vice President
----------------------------------
TRUSTEES OF BOSTON UNIVERSITY
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Title: Assistant Treasurer
----------------------------------
INTELLYSIS VENTURE PARTNERS I
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Title: President
----------------------------------
/s/ Xxxxxxx Xxxxx and Xxxxxxxxx X. Xxxxx, XX WROS
--------------------------------------------------
Xxxxxxx Xxxxx
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