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EXHIBIT 10.9
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "Agreement")
dated as of April 28, 2000, by and among Futurelink Corp., a Delaware
corporation (the "Company") and the stockholders signatories hereto (each, a
"Stockholder" and collectively the "Stockholders").
Terms and Conditions
The Company and certain of its stockholders are parties to a
Registration Rights Agreement dated as of October 15, 1999 (the "Existing
Registration Rights Agreement"). Pequot Endowment Fund, L.P. ("PEF") wishes to
become a party to the Existing Registration Rights Agreement as a "Stockholder"
thereunder, and the Company and the Stockholders therefore have agreed to amend
and restate the Existing Registration Rights Agreement to include PEF as a
party.
In consideration of the mutual covenants and agreements contained in
this Agreement and the Purchase Agreement, and intending to be legally bound,
the parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms
have the meanings indicated below or in the referenced sections of this
Agreement:
"Common Stock." The Company's Common Stock, $.0001 par value per share,
as the same may be constituted from time to time.
"Demand Registration." As defined in Section 3(a) hereof.
"Exchange Act." The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
"NASD." The National Association of Securities Dealers, Inc.
"Person." An individual, a partnership, a corporation, a limited
liability company or partnership, an association, a joint stock company, a
trust, a business trust, a joint venture, an unincorporated organization or a
government entity or any department, agency, or political subdivision thereof.
"Piggyback Registration." As defined in Section 4(a) hereof.
"Registrable Securities." Any shares of Common Stock of the Company held
by the Stockholders named on Schedule I hereto and any shares of Common Stock
that such Stockholder has the right to acquire, or does acquire, upon the
conversion or exercise of any option, warrant or other convertible security of
the Company or, in either case, their transferees; provided, that a Registrable
Security ceases to be a Registrable Security when (i) it is registered under the
Securities Act, (ii) it is sold or transferred in accordance with the
requirements of Rule
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144 (or similar provisions then in effect) promulgated by the SEC under the
Securities Act ("Rule 144"), or (iii) it is eligible to be sold or transferred
under Rule 144 without holding period or volume limitations.
"Registration Expenses." As defined in Section 7(a) hereof.
"SEC." The United States Securities and Exchange Commission.
"Securities Act." The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
Section 2. Securities Subject to this Agreement.
(a) Holders of Registrable Securities. A Person is deemed to be a holder
of Registrable Securities whenever that Person owns, directly or beneficially,
or has the right to acquire Registrable Securities, disregarding any legal
restrictions upon the exercise of that right.
(b) Majority of Registrable Securities. As used in this Agreement, the
term "majority of the Registrable Securities" means 51% or more of the
Registrable Securities being registered unless the context indicates that it is
51% or more of the Registrable Securities then issued and outstanding.
Section 3. Demand Registration.
(a) Request for Registration. Subject to the provisions of Section 3(b),
at any time and from time to time any one or more holders of Registrable
Securities may demand that the Company register all or part of its Registrable
Securities under the Securities Act such number of times and with such
restrictions as set forth opposite such holders name in Schedule I hereto (a
"Demand Registration"), provided, that for any Demand Registration the aggregate
number of shares to be registered per Demand Registration shall (i) represent
not less than 3% of the then issued and outstanding shares of Common Stock of
the Company or (ii) have a market value of at least $5 million as measured by
the average of the closing bid and asked price of the Common Stock on the date
immediately preceding the date of the demand. Within ten (10) days after receipt
of a demand, the Company will notify in writing all holders of Registrable
Securities of the demand. Any holder who wants to include his or its Registrable
Securities in the Demand Registration must notify the Company within ten (10)
business days of receiving the notice of the Demand Registration. Except as
provided in this Section 3, the Company will include in all Demand Registrations
all Registrable Securities for which the Company receives the timely written
demands for inclusion and may include such newly issued shares as the Company
may desire. All demands made pursuant to this Section 3(a) must specify the
number of Registrable Securities to be registered and the intended method of
disposing of the Registrable Securities.
(b) Form of Registration. The Demand Registration will be on Form S-3
whenever the Company is permitted to use such form, unless the holders of a
majority of the Registrable Securities or the underwriter reasonably request
registration on an expanded form. The Company will use commercially reasonable
efforts to qualify for registration on Form S-3.
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(c) Registration Expenses. The Company will pay all Registration
Expenses for any Demand Registrations.
(d) Selection of Underwriters. The holders requesting the Demand
Registration shall select the investment banker(s) and manager(s) that will
administer the offering; provided, that the Company shall have given its prior
written consent to such selection (which consent shall not be unreasonably
delayed, conditioned or withheld). The Company and the holders of Registrable
Securities whose shares are being registered shall enter into a customary
underwriting agreement with such investment banker(s) and manager(s).
(e) Priority on Demand Restrictions. If the managing underwriter gives
the Company and the holders of the Registrable Securities being registered a
written opinion that the number of Registrable Securities requested to be
included in the Demand Registration exceeds the number of securities that can be
sold, the Company will include in the registration only the number of
Registrable Securities that the underwriters believe can be sold. The number of
securities registered shall be allocated, first to the Company, to the extent it
wishes to register newly issued shares, then to the holders requesting the
Demand Registration, and then pro rata among the other holders of Registrable
Securities, on the basis of the total number of Company securities requested to
be included in the registration. In addition, if the managing underwriter shall
advise the Company, in writing or otherwise, that an underwriters'
over-allotment option, not in excess of 15% of the total offering to be so
effected, is necessary or desirable for the marketing of such offering, all
Company securities which are to be included in such offering pursuant to this
Section 3(e) shall be allocated first to the primary portion of such offering
and then to the underwriters' over-allotment portion on the basis of the
priority described in the preceding sentence.
(f) Delay in Filing. Notwithstanding the foregoing, the Company may
delay in filing a registration statement in connection with a Demand
Registration and may withhold efforts to cause the registration statement to
become effective, if the Company determines in good faith that such registration
might (1) interfere with or affect the negotiation or completion of any
transaction or other material event that is being contemplated by the Company
(whether or not a final decision has been made to undertake such transaction) at
the time the right to delay is exercised, or (2) involve initial or continuing
disclosure obligations that might not be in the best interest of the Company's
stockholders. The Company may exercise such right to delay or withhold efforts
not more than twice in any twelve (12) month period and for not more than ninety
(90) days at a time. If, after a registration statement becomes effective, the
Company advises the holders of registered shares that the Company considers it
appropriate for the registration statement to be amended, the holders of such
shares shall suspend any further sales of their registered shares until the
Company advises them that the registration statement has been amended. The
180-day time period referred to in Section 6(a)(3) during which the registration
statement must be kept current after its effective date shall be extended for an
additional number of business days equal to the number of business days during
which the right to sell shares was suspended pursuant to the preceding sentence.
(g) Effective Demand Registration. A registration shall not constitute a
Demand Registration until it has become effective and remains continuously
effective for the lesser of (i) the period during which all Registrable
Securities registered in the Demand Registration are
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sold and (ii) 180 days; provided, however, that a registration shall not
constitute a Demand Registration if (w) after such Demand Registration has
become effective, such registration or the related offer, sale or distribution
of Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental agency
or court for any reason not attributable to the holders requesting the Demand
Registration or the holders of Registrable Securities requesting to be included
in such registration and such interference is not thereafter eliminated within
five (5) business days, or (x) the conditions specified in the underwriting
agreement, if any, entered into in connection with such Demand Registration are
not satisfied or waived, other than by reason of a failure on the part of the
holders requesting the Demand Registration or the holders of Registrable
Securities requesting to be included in such registration, or (y) the number of
Registrable Securities sold by the holders in such Demand Registration is less
than fifty percent (50%) of the number of Registrable Securities requested to be
included in such Demand Registration or (z) the number of Registrable Securities
registered by the Company in such Demand Registration is less than seventy-five
percent (75%) of the number of Registrable Securities requested to be included
in such Demand Registration.
(h) Requirement to Register. Notwithstanding anything else contained in
this Agreement to the contrary, to the extent a holder of Registrable Securities
has been delayed, restricted or otherwise prevented from registering any or all
such Registrable Securities as such holder may desire for a period of eighteen
(18) months from either (i) the date of this Agreement or (ii) if a Demand
Registration right has been exercised by such holder, from the effective date of
such registration statement filed pursuant to such Demand Registration due to,
among other things, any provisions contained in this Agreement or Schedule I
hereto, then (a) such holder shall be permitted to exercise any of its Demand
Registration or Piggyback Registration rights hereunder (subject to the
provisions hereof), (b) the Company shall be obligated to promptly upon exercise
of such rights, in accordance with the terms hereof, register all of such
Registrable Securities immediately without regard to any delaying, prioritizing
or restrictive provisions and (c) from the effective date of the registration
statement filed pursuant to such holder's Demand Registration or Piggyback
Registration until six (6) months following completion of the sale of such
Registrable Securities, the Company shall not register or make any public sale
or distribution of its equity securities (except pursuant to registrations on
Form S-8 or S-4 or any successor form).
Section 4 Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register
(including on behalf of a selling stockholder) any of its securities under the
Securities Act (except for the registration of securities to be offered pursuant
to an employee benefit plan on Form S-8, pursuant to a registration made on Form
S-4 or any successor forms then in effect) at any time other than pursuant to a
Demand Registration and the registration form to be used may be used for the
registration of the Registrable Securities (a "Piggyback Registration"), it will
so notify in writing all holders of Registrable Securities no later than the
earlier to occur of (i) the tenth (10th) day following the Company's receipt of
notice of exercise of other demand registration rights, or (ii) forty-five (45)
days prior to the anticipated filing date. Subject to the provisions of Section
4(c), the Company will include in the Piggyback Registration all Registrable
Securities, on a pro rata basis based upon the total number of Registrable
Securities with respect to which the
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Company has received written requests for inclusion within fifteen (15) business
days after the applicable holder's receipt of the Company's notice. Such
Registrable Securities may be made subject to an underwriters' over-allotment
option, if so requested by the managing underwriter. The holders of Registrable
Securities may withdraw all or any part of the Registrable Securities from a
Piggyback Registration at any time before ten (10) business days prior to the
effective date of the Piggyback Registration. The Company, the holders of
Registrable Securities and any Person who hereafter become entitled to register
its securities in a registration initiated by the Company must sell their
securities on the same terms and conditions. A registration of Registrable
Securities pursuant to this Section 4 shall not be counted as a Demand
Registration under Section 3.
(b) Piggyback Expenses. The Company shall pay to the holders of the
Registrable Securities included in a Piggyback Registration all Registration
Expenses of those holders (except to the extent prohibited by applicable state
securities laws).
(c) Priority on Piggyback Registrations. If the managing underwriter
gives the Company its written opinion that the total number or dollar amount of
securities requested to be included in the registration exceeds the number or
dollar amount of securities that can be sold, the Company will include the
securities in the registration in the following order of priority: (i) first,
all securities the Company or the holder for whom the Company is effecting the
registration, as the case may be, proposes to sell; (ii) second, up to the full
number or dollar amount of Registrable Securities requested to be included in
the registration (allocated pro rata among the holders of Registrable
Securities, on the basis of the dollar amount or number of Registrable
Securities requested to be included, as the case may be); and (iii) third, any
other securities (provided they are of the same class as the securities sold by
the Company) requested to be included, allocated among the holders of such
securities in such proportions as the Company and those holders may agree. In
the event that the managing underwriter advises the Company that an
underwriters' over-allotment option is necessary or advisable, the preceding
priority shall apply to the determination of which securities are to be included
in the primary portion of such registration.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the Company will select the investment banker(s) and
manager(s) that will administer the offering. The Company and the holders of
Registrable Securities whose shares are being registered shall enter into a
customary underwriting agreement with such investment banker(s) and manager(s).
Section 5. Holdback Agreements.
(a) Restrictions on Public Sale by Securities Holders. Each Stockholder
agrees not to make any public sale or distribution of equity securities of the
Company (except as part of the underwritten registration effected pursuant to a
Demand Registration or a Piggyback Registration or pursuant to registration on
Form S-8 or any successor form), including a sale pursuant to Rule 144, during
such customary period prior to and following the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration as
any managing underwriter(s) of such underwriting may reasonably request.
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(b) Restrictions on Public Sale by the Company and Others. The Company
agrees not to make any public sale or distribution of its equity securities, or
any securities convertible into or exchangeable or exercisable for its equity
securities, including a sale under Regulation D under the Securities Act or
under any other exemption of the Securities Act (except as part of the
underwritten registration effected pursuant to a Demand Registration or a
Piggyback Registration or pursuant to registrations on Forms S-8 or S-4 or any
successor form), during such customary period prior to and following the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration as any managing underwriter(s) of such underwriting may
reasonably request. The Company also agrees to use reasonable efforts to cause
each holder of at least 5% (on a fully-diluted basis) of its equity securities
(other than Registrable Securities) or any securities convertible into or
exchangeable or exercisable for its equity securities (other than Registrable
Securities), purchased from the Company at any time on or after the date of this
Agreement (other than in a registered public offering), to agree not to make any
public sale or distribution of those securities, including a sale pursuant to
Rule 144 (except as part of the underwritten registration, if permitted), during
the seven (7) days prior to and the 180 days after the effective date of the
registration unless the managing underwriter(s) agrees otherwise.
Section 6. Registration Procedures.
(a) Obligations of the Company. Whenever the holders of Registrable
Securities request the registration of any Registrable Securities pursuant to
this Agreement, the Company shall use its best efforts to register and to permit
the sale of the Registrable Securities in accordance with the intended method of
disposition. To carry out this obligation, the Company shall as expeditiously as
practicable:
(1) prepare and file with the SEC a registration statement on the
appropriate form and use commercially reasonable efforts to cause the
registration statement to become effective. At least ten (10) days
before filing a registration statement or prospectus or at least three
(3) business days before filing any amendments or supplements thereto,
the Company will furnish to the counsel of the holders of a majority of
the Registrable Securities being registered copies of all documents
proposed to be filed for that counsel's review and approval, which
approval shall not be unreasonably withheld or delayed;
(2) immediately notify each seller of Registrable Securities of
any stop order threatened or issued by the SEC and take all actions
reasonably required to prevent the entry of a stop order or if entered
to have it rescinded or otherwise removed;
(3) prepare and file with the SEC such amendments and supplements
to the registration statement and the corresponding prospectus necessary
to keep the registration statement effective for 180 days or such
shorter period as may be required to sell all Registrable Securities
covered by the registration statement; and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by the registration statement during each period in accordance
with the sellers' intended methods of disposition as set forth in the
registration statement;
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(4) furnish to each seller of Registrable Securities a sufficient
number of copies of the registration statement, each amendment and
supplement thereto (in each case including all exhibits), the
corresponding prospectus (including each preliminary prospectus), and
such other documents as a seller may reasonably request to facilitate
the disposition of the seller's Registrable Securities;
(5) use its best efforts to register or qualify the Registrable
Securities under securities or blue sky laws of jurisdictions in the
United States of America as any seller requests and do any and all other
reasonable acts and things that may be necessary or advisable to enable
the seller to consummate the disposition of the seller's Registrable
Securities in such jurisdiction; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then
qualified or to file any general consent to service of process;
(6) notify each seller of Registrable Securities, at any time
when a prospectus is required to be delivered under the Securities Act,
of any event as a result of which the prospectus or any document
incorporated therein by reference contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under
which such statements were made, and prepare a supplement or amendment
to the prospectus or any such document incorporated therein so that
thereafter the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under
which such statements were made;
(7) cause all registered Registrable Securities to be listed on
each securities exchange, if any, on which similar securities issued by
the Company are then listed;
(8) provide an institutional transfer agent and registrar and a
CUSIP number for all Registrable Securities on or before the effective
date of the registration statement;
(9) enter into such customary agreements (including an
underwriting agreement in customary form) and take all other actions in
connection with those agreements as the holders of the Registrable
Securities being registered or the underwriters, if any, reasonably
request to expedite or facilitate the disposition of the Registrable
Securities;
(10) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
the registration statement, and any attorney, accountant, or other agent
of any seller or underwriter, all financial and other records, pertinent
corporate documents, and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
requested by any seller, underwriter, attorney, accountant, or other
agent in connection with the registration statement; provided that an
appropriate and customary confidentiality agreement is executed by any
such seller, underwriter, attorney, accountant or other agent;
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(11) in connection with any underwritten offering, obtain a
"comfort" letter from the Company's independent public accountants in
customary form and covering those matters customarily covered by
"comfort" letters as the holders of Registrable Securities being
registered or the managing underwriter reasonably requests (and, if the
Company is able after using commercially reasonable efforts, the letter
shall be addressed to holders of the Registrable Securities, the Company
and the underwriters);
(12) in connection with any underwritten offering, furnish, at
the request of any holder of Registrable Securities being registered or
underwriter(s) of the offering, an opinion of counsel representing the
Company for the purposes of the registration, in the form and substance
customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to counsel representing the holders of
Registrable Securities being registered and the underwriter(s) of the
offering, addressed to the underwriters and to the holders of the
Registrable Securities being registered;
(13) use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement complying with the
provisions of Section 11(a) of the Securities Act and covering the
period of at least twelve (12) months, but not more than eighteen (18)
months, beginning with the first month after the effective date of the
Registration Statement;
(14) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
required to be made with the NASD; and
(15) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
(b) Seller Information. In the event of any registration by the Company,
from time to time, the Company may require each seller of Registrable Securities
subject to the registration to furnish to the Company information regarding such
seller and the distribution of the securities subject to the registration, and
such seller shall furnish all such information requested by the Company.
(c) Notice to Discontinue. Each holder of Registrable Securities agrees
by acquisition of such securities that, upon receipt of any notice from the
Company of any event of the kind described in Section 6(a)(6), the holder will
discontinue disposition of Registrable Securities until the holder receives
copies of the supplemented or amended prospectus contemplated by Section
6(a)(6). In addition, if the Company requests, the holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in the holder's possession, of the prospectus covering the Registrable
Securities current at the time of receipt of the notice. If the Company gives
any such notice, the time period mentioned in Section 6(a)(3) shall be extended
by the number of days elapsing between the date of notice and the date that each
seller receives the copies of the supplemented or amended prospectus
contemplated in Section 6(a)(6).
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(d) Notice by Holders. Whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, those holders shall notify the Company, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event, which as to any holder of Registrable Securities is (i)
to his or its respective knowledge, (ii) solely within his or its respective
knowledge and (iii) solely as to matters concerning that holder of the
Registrable Securities, as a result of which the prospectus included in the
registration statement contains an untrue statement of a material fact or omits
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 7. Registration Expenses.
(a) Generally. All Registration Expenses incident to the Company's
performance of or compliance with this Agreement shall be paid as provided in
this Agreement. The term "Registration Expenses" includes without limitation all
registration filing fees, reasonable professional fees and other reasonable
expenses of the Company's compliance with federal, state and other securities
laws (including fees and disbursements of counsel for the underwriters in
connection with state or other securities law qualifications and registrations),
printing expenses, messenger, telephone and delivery expenses; reasonable fees
and disbursements of counsel for the Company; reasonable fees and disbursement
of all independent certified public accountants (including the expenses of any
audit or "comfort" letters required by or incident to performance of the
obligations contemplated by this Agreement); fees and expenses of the
underwriters (excluding discounts and commissions); fees and expenses of any
special experts retained by the Company at the request of the managing
underwriters in connection with the registration; and applicable stock exchange
and NASD registration and filing fees. The term "Registration Expenses" does not
include the Company's internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed, all of which shall be paid by the Company, nor does it include
underwriting fees or commissions or transfer taxes, all of which shall be paid
by the sellers of Registrable Securities.
(b) Other Expenses. To the extent the Company is not required to pay
Registration Expenses, each holder of securities included in any registration
will pay those Registration Expenses allocable to the holder's securities so
included, and any Registration Expenses not allocable will be borne by all
sellers in proportion to the number of securities each registers.
Section 8. Indemnification.
(a) Indemnification by Company. In the event of any registration of
Registrable Securities under the Securities Act pursuant to this Agreement, to
the full extent permitted by law, the Company agrees to indemnify each holder of
Registrable Securities, its officers, directors, trustees, partners, employees,
advisors and agents, and each Person who controls the holder (within the meaning
of the Securities Act and the Exchange Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or allegedly untrue statement of
material fact contained in any registration statement under which such
Registrable Securities were
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registered under the Securities Act, any prospectus or preliminary prospectus
contained therein or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which such statements were made,
except to the extent the untrue or allegedly untrue statement or omission or
alleged omission resulted from information that the holder furnished in writing
to the Company expressly for use therein. In connection with a firm or best
efforts underwritten offering, to the extent customarily required by the
managing underwriter, the Company will indemnify the underwriters, their
officers and directors and each Person who controls the underwriters (within the
meaning of the Securities Act and the Exchange Act), to the extent customary in
such agreements.
(b) Indemnification by Holders of Securities. In connection with any
registration statement, each participating holder of Registrable Securities will
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any registration statement or
prospectus and each holder agrees to indemnify, to the extent permitted by law,
the Company, its directors, officers, trustees, partners, employees, advisors
and agents, and each Person who controls the Company (within the meaning of the
Securities Act and the Exchange Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or allegedly untrue statement
of a material fact or any omission or alleged omission to state a material fact
required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto necessary to make the statements therein
not misleading in light of the circumstances under which such statements were
made, but only to the extent that the untrue or allegedly untrue statement or
omission or alleged omission is contained in or omitted from any information or
affidavit the holder furnished in writing to the Company expressly for use
therein and only in an amount not exceeding the net proceeds received by the
holder with respect to securities sold pursuant to such registration statement.
In connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, each participating holder of
Registrable Securities will indemnify the underwriters, their officers and
directors and each Person who controls the underwriters (within the meaning of
the Securities Act and the Exchange Act), to the extent customary in such
agreements.
(c) Indemnification Proceedings. Any Person entitled to indemnification
under this Agreement will (i) give prompt notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (ii) unless in the
indemnified party's reasonable judgment a conflict of interest may exist between
the indemnified and indemnifying parties with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party does not assume
the defense, the indemnifying party will not be liable for any settlement made
without its consent (but that consent may not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or will enter into any
settlement that does not include as an unconditional term thereof the claimant's
or plaintiff's release of the indemnified party from all liability concerning
the claim or litigation. An indemnifying party who is not entitled to or elects
not to assume the defense of a claim will not be under an obligation to pay the
fees and expenses of more than one counsel for all parties indemnified by the
indemnifying party with respect to the claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between the
indemnified party and any other indemnified party with respect to the claim, in
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which event the indemnifying party shall be obligated to pay the fees and
expenses of no more than one additional counsel for the indemnified parties.
(d) Contribution. If the indemnification provided for in Section 8(a) or
(b) is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying
party thereunder shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Company and the participating holders of Registrable Securities in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company and the
participating holders of Registrable Securities shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the participating holders
of Registrable Securities and the parties' relative intent and knowledge.
The parties hereto agree that it would not be just and equitable if
contribution pursuant this Section 8(d) were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding anything herein to the contrary, no participating holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the net proceeds of the offering (before deducting expenses,
if any) received by such participating holder exceeds the amount of any damages
that such participating holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
Section 9. Rule 144. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder, and it will take
such further action as any holder of Registrable Securities reasonably may
request, all to the extent required from time to time, to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon
the request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with Rule 144's or
any successor rule's requirements. The Company also covenants that in such event
it will provide all such information and it will take such further action as any
holder of Registrable Securities reasonably may request to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of Rule 144 under the Securities Act or any successor rule
requirements.
Section 10. Participation in Underwritten Registration. No Person may
participate in any underwritten registration without (a) agreeing to sell
securities on the basis provided in underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements (the holders of the
Registrable Securities in a Demand Registration pursuant to Section 3(d) and the
Company in a Piggyback Registration pursuant to Section 4(d)), and (b)
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completing and executing all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required by the underwriting
arrangements.
Section 11. Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The provisions of this Agreement
shall apply to the full extent set forth herein with respect to (i) the shares
of Common Stock held by the Stockholders, (ii) any and all shares of voting
common stock of the Company into which the shares of such Common Stock are
converted, exchanged or substituted in any recapitalization or other capital
reorganization by the Company and (iii) any and all equity securities of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in conversion of, in exchange for or in substitution of, such shares of Common
Stock and shall be appropriately adjusted for any stock dividends, splits,
reverse splits, combinations, recapitalizations and the like occurring after the
date hereof. The Company shall use its best efforts to cause any successor or
assign (whether by sale, merger or otherwise) to enter into a new registration
rights agreement with the holders of Registrable Securities on terms
substantially the same as this Agreement as a condition of any such transaction.
(b) Amendment. This Agreement may be amended or modified only by a
written agreement executed by the Company and the Stockholders.
(c) Attorneys' Fees. In any legal action or proceeding brought to
enforce any provision of this Agreement, the prevailing party shall be entitled
to recover all reasonable expenses, charges, court costs and attorneys' fees in
addition to any other available remedy at law or in equity.
(d) Benefit of Parties; Assignment. All of the terms and provisions of
this Agreement shall be binding on and inure to the benefit of the parties and
their respective successors and assigns, including without limitation all
subsequent holders of securities entitled to the benefits of this Agreement who
agree in writing to become bound by the terms of this Agreement. Without
limiting the generality of the foregoing, this Agreement and the rights and
obligations of a holder of Registrable Securities hereunder may be assigned, in
whole or in part, upon notice to the Company, to a Person who owns, or
simultaneously with the assignment of the rights under this Agreement to such
Person, will own, shares of capital stock of the Company.
(e) Captions. The captions of the sections and subsections of this
Agreement are solely for convenient reference and shall not be deemed to affect
the meaning or interpretation of any provision of this Agreement.
(f) Cooperation. The parties agree that after execution of this
Agreement they will from time to time, upon the request of any other party and
without further consideration, execute, acknowledge and deliver in proper form
any further instruments and take such other action as any other party may
reasonably require to carry out effectively the intent of this Agreement.
(g) Counterparts; Facsimile Execution. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of
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which together shall constitute one and the same agreement. Facsimile execution
and delivery of this Agreement shall be legal, valid and binding execution and
delivery for all purposes.
(h) Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings between the parties with
respect thereto. There are no promises, covenants or undertakings other than
those expressly set forth or provided for in this Agreement.
(i) Governing Law. The internal law of the State of New York will govern
the interpretation, construction, and enforcement of this Agreement and all
transactions and agreements contemplated hereby, notwithstanding any state's
choice of law rules to the contrary.
(j) No Inconsistent Agreements. The Company represents and warrants that
it has not granted to any Person the right to request or require the Company to
register any securities issued by the Company other than the rights contained
herein. Except with the prior written consent of the holders of Registrable
Securities, the Company will not enter into any agreement with respect to its
securities that shall grant to any Person registration rights that in any way
conflict with or are prior in right to the rights provided under this Agreement.
(k) Notices. All notices, requests, demands, or other communications
that are required or may be given pursuant to the terms of this Agreement shall
be in writing and delivery shall be deemed sufficient in all respects and to
have been duly given on the date of service if delivered personally to the party
to whom notice is to be given, or upon receipt if mailed by first class mail,
return receipt requested, postage prepaid, and properly addressed to the
addresses of the parties set forth in the Purchase Agreement or to such other
address(es) as the respective parties hereto shall from time to time designate
to the other(s) in writing.
(l) Specific Performance. Each of the parties agrees that damages for a
breach of or default under this Agreement would be inadequate and that in
addition to all other remedies available at law or in equity that the parties
and their successors and assigns shall be entitled to specific performance or
injunctive relief, or both, in the event of a breach or a threatened breach of
this Agreement.
(m) Validity of Provisions. Should any part of this Agreement for any
reason be declared by any court of competent jurisdiction to be invalid, that
decision shall not affect the validity of the remaining portion, which shall
continue in full force and effect as if this Agreement had been executed with
the invalid portion eliminated, it being the intent of the parties that they
would have executed the remaining portion of the Agreement without including any
part or portion that may for any reason be declared invalid.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FUTURELINK CORP.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name:
Title:
PEQUOT PRIVATE EQUITY FUND II, L.P.
By: Pequot Capital Management, Inc., its
investment manager
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, Chief Financial Officer
PEQUOT INTERNATIONAL FUND, INC.
By: Pequot Capital Management, Inc., its
investment advisor
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, Chief Financial Officer
PEQUOT PARTNERS FUND, L.P.
By: Pequot Capital Management, Inc., its
investment manager
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx, Chief Financial Officer
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PEQUOT ENDOWMENT FUND, L.P.
By: Pequot Capital Management, Inc., its
investment manager
By: /s/ XXXXX X. XXXXX
---------------------------------------
Xxxxx X. Xxxxx, Chief Financial Officer
DIMENSIONAL PARTNERS LTD.
By: JDS Capital Management, Inc.,
its investment management and subadvisor
By: /s/ XXXXXX XXXXXXX
---------------------------------------
Xxxxxx Xxxxxxx, President
DIMENSIONAL PARTNERS L.P.
By: JDS Capital Management, Inc.,
its investment manager and subadvisor
By: /s/ XXXXXX XXXXXXX
------------------------------------------
Xxxxxx Xxxxxxx, President
/s/ XXXX X. XXXXXX
------------------------------------------
Xxxx X. Xxxxxx
XXXXXX XXXXXX XXXXXXXX & CO., INC.
By:
---------------------------------
Name:
Title:
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SCHEDULE I
Name and Address Number of Demand Other
of Stockholder Registrations Restrictions
---------------- ---------------- ------------
1. Pequot Private Equity Fund II Two Demand Registrations on No Demand Registrations
Pequot International Fund, Form S-1 in the aggregate may be requested prior to
Inc. for all Investors; April 15, 2000
Pequot Partners Fund, L.P. Unlimited number of Demand
Pequot Endowment Fund, L.P. Registrations on Form S-3
Dimensional Partners Ltd.
Dimensional Partners L.P.
(collectively, the
"Investors")
2. Xxxx Xxxxxx None
3. Xxxxxx Xxxxxx Xxxxxxxx & Co., None
Inc.
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