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EXHIBIT 4.4
INVESTOR RIGHTS AGREEMENT
This INVESTOR RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of February 10, 1999, by and among XXXXXXXXXX.XXX, INC., a Delaware
corporation (the "CORPORATION"), and INTUIT INC., a Delaware corporation (the
"INVESTOR"), with reference to the following facts:
A. The Corporation proposes to sell and issue One Million (1,000,000)
shares of its Common Stock, par value $.001 per share (the "COMMON STOCK"),
pursuant to that certain Stock Purchase Agreement between the Corporation and
the Investor dated as of the date hereof (the "PURCHASE AGREEMENT").
B. As a condition of entering into the Purchase Agreement, the Investor
has requested that the Corporation extend to the Investor and its assigns
certain registration rights as set forth below.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Purchase 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:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"HOLDER" means (i) any person owning of record Registrable Securities
that have not been sold to the public or (ii) any assignee of record of such
Registrable Securities in accordance with Section 2.10 hereof.
"INITIAL OFFERING" means the Corporation's first firm commitment
underwritten public offering of its 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 applicable rules and regulations thereunder, and the
declaration or ordering of effectiveness of such registration statement or
document.
"REGISTRABLE SECURITIES" means (i) the Shares (as defined in the
Purchase Agreement) and any other shares of Common Stock issued or transferred
to the Investor pursuant to the Purchase Agreement or the Stockholders' Rights
Agreement (as defined in the Purchase Agreement) and (ii) any Common Stock of
the Corporation 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, any of
the Shares or the shares of Common Stock
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identified in the foregoing clause (i). 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 transferror's rights under Section 2 of this
Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of the Corporation's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Corporation in complying with Sections 2.2, 2.3 and 2.4 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Corporation, reasonable fees and
disbursements of a single special counsel for the Holders, 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
Corporation which shall be paid in any event by the Corporation).
"SEC" or "COMMISSION" means the Securities and Exchange Commission or
any other successor federal agency at the time administering the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations thereunder,
all as the same shall be in effect from time to time.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and fees and
disbursements of counsel for any Holder (other than the fees and disbursements
of counsel included in Registration Expenses).
"SHARES" shall mean the shares of the Corporation's Common Stock held
by the Investor and its permitted assigns.
"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 Corporation
with the SEC.
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 Shares or Registrable Securities unless and until:
(i) 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; or
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(ii) (A) The transferee has agreed in writing to be bound
by the terms of this Agreement, (B) such Holder shall have notified the
Corporation of the proposed disposition and shall have furnished the Corporation
with a detailed statement of the circumstances surrounding the proposed
disposition, and (C) such Holder shall have furnished the Corporation with an
opinion of counsel, reasonably satisfactory to the Corporation, that such
disposition will not require registration of such shares under the Securities
Act. It is agreed that the Corporation will not require opinions of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by Intuit or its permitted transferees hereunder to its
shareholders, members, partners, officers, directors or employees or to one or
more other partnerships, corporations, limited liability companies, trusts or
other organizations which are controlled by, control or are under common control
with Intuit or its permitted transferees hereunder (each an "INTUIT AFFILIATE");
provided that in each case the transferee will be subject to the terms of this
Agreement to the same extent as if such transferee were an original Holder
hereunder.
(b) Each certificate representing 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 or as provided elsewhere in this Agreement):
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 CORPORATION HAS RECEIVED
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Corporation 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 (which counsel may be counsel to the
Corporation) reasonably acceptable to the Corporation 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 Corporation of an order
of the appropriate blue sky authority authorizing such removal.
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2.2 Demand Registration
(a) Subject to the conditions of this Section 2.2, if the
Corporation shall receive a written request from the Holders of more than
twenty-five (25%) of the Registrable Securities then outstanding (the
"INITIATING HOLDERS") that the Corporation file a registration statement under
the Securities Act covering the registration of Registrable Securities, then the
Corporation shall, within thirty (30) 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, the
registration under the Securities Act of all Registrable Securities that the
Holders request to be registered.
(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 Corporation as a part of their request made pursuant to
this Section 2.2 or any request pursuant to Section 2.4 and the Corporation
shall include such information in the written notice referred to in Section
2.2(a) or Section 2.4(a), as applicable. 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 (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) 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 Corporation).
Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the
underwriter advises the Corporation that marketing factors require a limitation
of the number of securities to be underwritten (including Registrable
Securities), then the Corporation shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares that may be included in the underwriting shall be allocated to the
Holders of such Registrable Securities on a pro rata basis based on the number
of Registrable Securities that have been requested to be registered by all such
Holders (including the Initiating Holders). Unless a majority in interest of the
Initiating Holders shall give their written consent, no other person (including
the Corporation), other than a Holder, shall be permitted to offer securities
under any registration pursuant to this Section 2.2; provided, however, that in
no event may any person (other than a Holder) be permitted to include securities
in a registration pursuant to this Section 2.2 if the effect thereof would be to
cause the exclusion of any Registrable Securities under the preceding sentence.
Any Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.
(c) A registration will not count as a registration under this
Section 2.2 until it has become effective and until:
(i) the Registrable Securities included in such
registration have actually been sold thereunder; or
(ii) the registration has been continuously effective for
a period of nine (9) months.
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(d) The Corporation shall not be required to effect a
registration pursuant to this Section 2.2:
(i) if the request for registration is exercised by the
Holders prior to one hundred eighty (180) days after the Initial Offering; or
(ii) if less than 250,000 Registrable Securities are to be
sold; or
(iii) after the Corporation has effected two (2)
registrations pursuant to this Section 2.2, and such registrations have been
declared or ordered effective; or
(iv) during the period starting with the date of filing
of, and ending on the date one hundred eighty (180) days following the effective
date of the registration statement pertaining to the Initial Offering; provided
that the Corporation makes reasonable good faith efforts to cause such
registration statement to become effective; or
(v) if the Corporation 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 Corporation, it would be seriously detrimental to the
Corporation and its shareholders for such registration statement to be effected
at such time, in which event the Corporation 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 Corporation not more than once in any twelve (12)
month period.
2.3 Piggyback Registrations. The Corporation shall notify all Holders
of Registrable Securities in writing at least thirty(30) days prior to the
filing of any registration statement under the Securities Act for purposes of a
public offering of securities of the Corporation (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Corporation, but excluding registration statements relating to employee benefit
plans or with respect to mergers, acquisitions, 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 Corporation, so notify the Corporation 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 Corporation,
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 Corporation with respect to offerings of its
securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If the registration statement under which
the Corporation gives notice under this Section 2.3 is for an underwritten
offering, the Corporation 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
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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 Corporation. Notwithstanding any other
provision of the Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated, first, to the Corporation; second, to the holders of any
preferred stock of the Corporation to whom the Corporation shall have granted
priority registration rights superior to those of the Holders with respect to
the registration at issue ("PREFERRED HOLDERS"), if any; third, to the Holders
on a pro rata basis based on the total number of Registrable Securities that
have been requested to be registered by the Holders; and last, to any other
shareholders of the Corporation holding registration rights with respect to the
registration at issue (other than the Holders and any Preferred Holders) on a
pro rata basis. No such reduction shall (i) reduce the securities being offered
by the Corporation for its own account to be included in the registration and
underwriting or (ii) reduce the amount of securities of the selling Holders
included in the registration below thirty percent (30%) of the total amount of
securities included in such registration, unless (A) such reduction is by reason
of the registration rights of any Preferred Holders or (B) such offering is the
Initial Offering and such registration does not include shares of any other
selling shareholders (other than any Preferred Holders), in which events any or
all of the Registrable Securities of the Holders may be excluded in accordance
with the immediately preceding sentence. In no event will shares of any other
selling shareholder (except for any Preferred Holders) be included in such
registration which would reduce the number of shares which may be included by
Holders without the written consent of Holders of not less than a majority of
the Registrable Securities proposed to be sold in the offering.
(b) Right to Terminate Registration. The Corporation
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
Corporation in accordance with Section 2.5 hereof.
2.4 Form S-3 Registration. In case the Corporation shall receive
from any Holder or Holders of Registrable Securities a written request or
requests that the Corporation effect a registration on Form S-3 (or any
successor to Form S-3) or any similar short-form registration statement and any
related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Corporation will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders
of Registrable Securities; and
(b) as soon as practicable, effect 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
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from the
Corporation; provided, however, that the Corporation shall not be obligated to
effect any such registration, qualification or compliance pursuant to this
Section 2.4:
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(i) if Form S-3 (or any successor or similar
form) is not available for such offering by the Holder; or
(ii) If the Corporation has effected two (2)
registrations pursuant to this Section 2.4 within the preceding twelve (12)
months; or
(iii) if the Holders, together with the holders of
any other securities of the Corporation 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 $500,000; or
(iv) if the Corporation shall furnish to the
Holders a certificate signed by the Chairman of the Board of Directors of the
Corporation stating that, in the good faith judgment of the Board of Directors
of the Corporation, it would be seriously detrimental to the Corporation and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Corporation shall have the right to defer the filing of the Form
S-3 registration statement for a period of not more than one hundred twenty
(120) days after receipt of the request of the Holder or Holders under this
Section 2.4; provided that such right to delay a request shall be exercised by
the Corporation not more than once in any twelve (12) month period; or
(v) in any particular jurisdiction in which the
Corporation 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.
(c) Subject to the foregoing, the Corporation shall file
a Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders.
2.5 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 or Section 2.4 herein shall be borne by the Corporation. All Selling
Expenses relating to securities registered by the Holders 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 shares so registered. The
Corporation shall not, however, be required to pay for expenses of any
registration proceeding begun pursuant to Section 2.2 or 2.4, the request of
which has been subsequently withdrawn by the Initiating Holders unless (a) the
withdrawal is based upon material adverse information concerning the Corporation
of which the Initiating Holders were not aware at the time of such request or
(b) the Holders of a majority of Registrable Securities agree to forfeit their
right to one requested registration pursuant to Section 2.2 or Section 2.4, as
applicable, in which event such right shall be forfeited by all Holders). 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 shares for which registration
was requested. If the Corporation is required to pay the Registration Expenses
of a withdrawn offering pursuant to clause (a) above, then the Holders shall not
forfeit their rights pursuant to Section 2.2 or Section 2.4 to a demand
registration.
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2.6 Obligations of the Corporation Whenever required to effect
the registration of any Registrable Securities, the Corporation 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 nine (9) months
or, if earlier, until the Holder or Holders have completed the distribution
related thereto.
(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.
(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.
(d) Use all reasonable 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 Corporation 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) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Corporation for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Corporation, in form and substance as is
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customarily given by independent certified public accountants to underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting registration, addressed to the underwriters,
if any, and if permitted by applicable accounting standards, to the Holders
requesting registration of Registrable Securities.
(h) Use its best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;
(i) Use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange or quotation system on which
similar securities issued by the company are then listed or quoted, in each case
provided that the applicable listing or quotation requirements are satisfied;
(j) Make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant, or
another agent retained by any such seller or underwriter (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents,
and properties of the Company (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors, and employees to
supply all information reasonably requested by any such Inspector in connection
with such registration statement. Records which the Company determines, in good
faith, to be confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the registration statement or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. The seller of Registrable Securities agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(k) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon a reasonably practicable, an earnings statement covering a
period of twelve (12) months, beginning within three (3) months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
2.7 Termination of Registration Rights A Holder's registration
rights shall expire (i) if (A) the Corporation has completed its Initial
Offering and is subject to the provisions of the Exchange Act and (B) all
Registrable Securities held by and issuable to such Holder (and its affiliates,
members, partners and former partners) may be sold under Rule 144 during any
ninety (90) day period, or (ii) if earlier, five (5) years after the date of the
Initial Offering.
2.8 Delay of Registration; Furnishing Information.
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(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 Corporation to take any action pursuant to Section 2.2, 2.3 or 2.4 that
the selling Holders shall furnish to the Corporation 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 Corporation shall have no obligation with respect
to any registration requested pursuant to Section 2.2 or Section 2.4 if, due to
the operation of subsection 2.2(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Corporation's
obligation to initiate such registration as specified in Section 2.2 or Section
2.4, whichever is applicable.
2.9 Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Corporation will
indemnify and hold harmless each Holder, the partners, officers and directors of
each Holder, legal counsel, accountants, 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 Corporation: (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 Corporation 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 Corporation will reimburse each
such Holder, partner, shareholder, member, officer or director, legal counsel,
accountants, 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 2.9(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 Corporation, which consent
shall not be unreasonably withheld, nor shall the Corporation 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, shareholder, member,
officer, director, underwriter or controlling person of such Holder.
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(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 Corporation, each of its directors, its officers
and each person, if any, who controls the Corporation 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,
shareholders, members, directors or officers or any person who controls such
Holder, against any losses, claims, damages or liabilities (joint or several) to
which the Corporation or any such director, officer, controlling person,
underwriter or other such Holder, or partner, shareholder, member, 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 any Violation, 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 reimburse any legal or other expenses
reasonably incurred by the Corporation or any such director, officer,
controlling person, underwriter or other Holder, or partner, shareholder,
member, 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 2.9(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 2.9
exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.9 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 2.9, 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 2.9, 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 2.9.
(d) If the indemnification provided for in this Section 2.9 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
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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 proceeds from the
offering received by such Holder.
(e) The obligations of the Corporation and Holders under this
Section 2.9 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.
2.10 Assignment of Registration Rights The rights to cause the
Corporation to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities which
(i) is an Intuit Affiliate, or (ii) acquires at least fifty thousand (50,000)
shares of Registrable Securities or, if fewer than fifty thousand (50,000)
shares, at least twenty-five percent (25%) of such Holder's Registrable
Securities (in each case as adjusted for stock splits and combinations);
provided, however, (A) the transferor shall, within ten (10) days after such
transfer, furnish to the Corporation 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 (B) such transferee shall agree to be
subject to all restrictions set forth in this Agreement.
2.11 Limitation on Subsequent Registration Rights After the date of
this Agreement, the Corporation shall not, without the prior written consent of
a majority in interest of the Holders, enter into any agreement with any holder
or prospective holder of any securities of the Corporation that would grant such
holder registration rights; provided, however, that the provisions of this
Section 2.11 shall not apply to the grant of registration rights to the
purchasers of any preferred stock of the Corporation if the Corporation has
complied with its obligations to the Investor with respect to the offer and sale
of such preferred stock as set forth in Section 4 of the Stockholders' Rights
Agreement (as defined in the Purchase Agreement).
2.12 "Market Stand-Off" Agreement Each Holder hereby agrees that such
Holder shall not sell or otherwise transfer or dispose of any Registrable
Securities 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 Corporation not to exceed one hundred eighty (180)
days following the effective date of a registration statement of the Corporation
filed under the Securities Act; provided that:
(i) such agreement shall apply only to the Initial Offering;
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(ii) all officers, directors and employees holding Common
Stock or options to purchase Common Stock of the Corporation and holders of at
least three percent (3%) of the Corporation's voting securities enter into
similar agreements; and
(iii) such agreement shall provide that any discretionary
waiver or termination of the restrictions of such agreements by the Corporation
or representatives of the underwriters shall apply first to Holders on a pro
rata basis, prior to any waiver or termination of the restrictions on any holder
of securities other than a Holder.
Each Holder agrees to execute and deliver such other agreements as may
be reasonably requested by the Corporation or the underwriter which are
consistent with the foregoing or which are necessary to give further effect
thereto. The obligations described in this Section 2.13 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 Corporation may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period. Without limiting the foregoing, it is expressly
agreed that the provisions of this Section 2.12 shall not apply to any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock acquired by a Holder directly from the underwriters in a
registered public offering of the Corporation's securities or in an established
trading market from any party other than the Corporation.
2.13 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
Corporation 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 Corporation 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 Corporation under the Exchange Act;
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Corporation 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 Corporation; 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. MISCELLANEOUS.SECTION 3. MISCELLANEOUS.
3.1 Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the State of California without giving effect to the
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principles of conflicts of law. Each of the parties hereto hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of California and of the United States of America, in each
case located in the County of San Francisco, for any action, proceeding or
investigation in any court or before any governmental authority ("LITIGATION")
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any Litigation relating thereto except in
such courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in this
Agreement shall be effective service of process for any Litigation brought
against it in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation
arising out of this Agreement or the transactions contemplated hereby in the
courts of the State of California or the United States of America, in each case
located in the County of San Francisco, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Litigation brought in any such court has been brought in an
inconvenient forum.
3.2 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 from time to time;
provided, however, that prior to the receipt by the Corporation of adequate
written notice of the transfer of any Registrable Securities specifying the full
name and address of the transferee, the Corporation may deem and treat the
person listed as the holder of such shares in its records as the absolute owner
and holder of such shares for all purposes.
3.3 Entire Agreement This Agreement, the 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 with respect to the
subject hereof except as specifically set forth herein and therein.
3.4 Severability Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.
3.5 Amendment and Waiver
(a) Except as otherwise expressly provided, this Agreement may
be amended or modified only upon the written consent of the Corporation and a
majority in interest of the Holders; provided, however, any amendment of this
Agreement which would adversely affect a Holder in a manner different from other
Holders shall require the consent of such affected Holder.
(b) Except as otherwise expressly provided, the obligations of
the Corporation and the rights of the Holders under this Agreement may be waived
only with the written consent of a majority in interest of the Holders;
provided, however, any waiver of this Agreement which would adversely affect a
Holder in a manner different from other Holders shall require the consent of
such affected Holder.
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Any amendment or waiver effected in accordance with this Section 3.5
shall be binding upon each Holder and the Corporation. By acceptance of any
benefits under this Agreement, Holders hereby agree to be bound by the
provisions hereunder.
3.6 Delays or Omissions It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Corporation 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 Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
3.7 Notices All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1)
business 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 or
addresses as set forth on the signature pages hereof or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties hereto.
3.8 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.
3.9 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.
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3.10 Counterparts This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR
RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
CORPORATION: INVESTOR:
QUOTESMITH.CON, INC., INTUIT INC.,
a Delaware corporation a Delaware corporation
By: \s\ Xxxxxx X. Xxxxx By: \s\ Xxxx Xxxxx
------------------------------- -------------------------------
Title: President and CEO Title: Sr. Vice President
------------------------------- -------------------------------
Address: 0000 X. Xxxxx Xxxxxx Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000 Xxxxxxxx Xxxx, XX 00000
Xxxxxx, XX 00000 Attention: General Counsel
Attn: Mr. Xxxxxx Xxxxx
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