EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (this "Agreement") dated as of December 28,
2000 among marchFIRST, Inc., a Delaware corporation (the "Issuer"), FP-Lion,
L.L.C., a Delaware limited liability company (the "Purchaser"), and each person
who is, or becomes, a Holder.
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. Except as otherwise defined herein, terms
defined in the Stock Purchase Agreement dated as of the date hereof between the
Issuer and the Purchaser (as it may be amended from time to time, the "Stock
Purchase Agreement") are used herein as therein defined. In addition, the
following terms, as used herein, have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Holder" means a person who owns Registrable Securities and is either (a)
the Purchaser or (b) a transferee who has agreed in writing to be bound by the
terms of this Agreement.
"Piggyback Registration" means a Piggyback Registration as defined in
Section 2.02.
"Registrable Securities" means Securities that (i) have not been sold or
otherwise disposed of pursuant to a registration statement that was filed with
the Commission and declared effective under the Securities Act, (ii) are not
eligible for sale pursuant to Rule 144 without being subject to applicable
volume limitations thereunder, (iii) have not been otherwise sold, transferred
or disposed of by a Holder to any Person that is not a Holder or pursuant to
Rule 144, and (iv) have not ceased to be outstanding.
"Rule 144" means Rule 144 (or any successor rule of similar effect)
promulgated under the Securities Act.
"Securities" means (i) shares of Common Stock constituting Series A
Exchange Shares and (ii) shares of Common Stock constituting Series B Exchange
Shares.
"Selling Holder" means any Holder who is selling Registrable Securities
pursuant to an offering registered hereunder.
"Series A Certificate of Designations" means the Certificate of
Designations, Preferences and Rights of the Series A Preferred.
"Series A Exchange Shares" means shares of Common Stock that have been
issued or are issuable in exchange for, or upon conversion of, shares of Series
A Preferred in accordance with the Series A Certificate of Designations.
"Series A Preferred" means the Series A 8% Senior Convertible
Participating Preferred Stock of the Issuer.
"Series B Certificate of Designations" means the Certificate of
Designations, Preferences and Rights of the Series B Preferred.
"Series B Exchange Shares" means shares of Common Stock that have been
issued in exchange for shares of Series B Preferred in accordance with the
Series B Certificate of Designations.
"Series B Preferred" means the Series B 12% Senior Participating Preferred
Stock.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
Section 1.02. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement.
ARTICLE 2
REGISTRATION RIGHTS
Section 2.01. Demand Registration.
(a) (i) The Holders of a majority in interest of the Series A Exchange
Shares that are Registrable Securities, collectively, may make up to two
written requests for registration under the Securities Act of all or any part
of the Series A Exchange Shares held by such Holders (the "Series A Demand
Registrations") and (ii) the Holders of a majority in interest of the Series B
Exchange Shares that are Registrable Securities, collectively, may make up to
two written requests for registration under the Securities Act of all or any
part of the Series B Exchange Shares held by such Holders (the "Series B Demand
Registrations" and, together with the Series A Demand Registrations, the
"Demand Registrations"); provided that (A) if, in accordance with the terms of
the Series B Certificate of Designations, all outstanding shares of Series B
Preferred are converted into shares of Series A Preferred, then the number of
Series B Demand Registrations shall be reduced by one and the remaining Series
B Demand Registration, if any, shall thereupon be converted into a Series A
Demand Registration, (B) no Holder may request a Demand Registration prior to
the nine-month anniversary of the Closing Date, (C) no Demand Registration may
be requested within 180 days after the preceding request for a Demand
Registration, and (D) each Demand Registration must be (1) in respect of
Registrable Securities with a fair market value of at least $25,000,000 or (2)
in respect of all remaining
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Series A Exchange Shares or Series B Exchange Shares, as applicable, that are
Registrable Securities and have a fair market value of at least $500,000. Such
request will specify the aggregate number of shares of Registrable Securities
proposed to be sold and will also specify the intended method of disposition
thereof. Upon any such request, the Issuer shall promptly give written notice
of the requested registration at least 15 days prior to the anticipated filing
date of the registration statement relating to such Demand Registration to each
non-requesting Holder. Promptly after the expiration of such 15-day period, the
Issuer will notify all requesting Holders of the identities of the other
requesting Holders and the number of shares of Registrable Securities requested
to be included therein. At any time prior to the effective date of the
registration statement relating to such registration, the requesting Holders
may revoke such request, without liability to any of the other requesting
Holders, by providing a notice to the Issuer revoking such request.
(b) A Demand Registration shall not be deemed to have occurred unless the
registration statement relating thereto (i) has become effective under the
Securities Act and (ii) has remained effective for a period of at least 60
days, exclusive of any period referred to in (A) below (or such shorter period
in which all Registrable Securities of the Holders included in such
registration have actually been sold thereunder). In addition, a Demand
Registration shall not be deemed to have occurred if, after any registration
statement requested pursuant to this Section 2.01 becomes effective, (A) such
registration statement is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court (other than such an event which occurs on no more than one occasion with
respect to such registration statement and does not exceed a period of five
business days) and (B) less than 75% of the Registrable Securities included in
such registration statement has been sold thereunder. Should a Demand
Registration not become effective due to the failure of a Holder to perform its
obligations under this Agreement, provided, however, that at such time the
Issuer is in compliance in all material respects with its obligations under
this Agreement, then such Demand Registration shall be deemed to have been
effected; provided that if such failure to perform is due to a material adverse
change in the condition (financial or otherwise), business, assets or results
of operations of the Issuer and its subsidiaries taken as a whole that occurs
subsequent to the date of the written request made by the requesting Holders,
then the Demand Registration shall not be deemed to have been effected.
(c) In the event that the requesting Holders withdraw or do not pursue a
request for a Demand Registration and, pursuant to Section 2.01(b) hereof, such
Demand Registration is deemed to have been effected, the Holders may reacquire
such Demand Registration (such that the withdrawal or failure to pursue a
request will not count as a Demand Registration hereunder) if the Holders
reimburse the Issuer for any and all Registration Expenses (as defined in
Section 3.03) incurred by the Issuer in connection with such request for a
Demand Registration; provided that the right to reacquire a Demand Registration
may be exercised a maximum of two times.
(d) If the Selling Holders so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. A majority in interest of the Selling Holders shall have
the right to select the managing Underwriters and any additional investment
bankers and managers to be used in connection with such offering, but
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prior to making such selection shall consult with the Issuer with respect
thereto. In such event, the Issuer will reasonably assist with such offering
and will make members of senior management reasonably available to participate
(but only at such times and to such extent as will not interfere with the
performance of their duties to the Issuer) in a customary "roadshow" at the
Selling Holders' expense if the Underwriters believe that such a roadshow would
assist in an orderly distribution of the Registrable Securities.
(e) The Issuer will have the right to preempt any Demand Registration with
a primary registration by delivering written notice (within five business days
after the Issuer has received a request for such Demand Registration) of such
intention to the Selling Holders indicating that the Issuer has identified a
specific business need and use for the proceeds of the sale of such securities
and the Issuer shall use commercially reasonable efforts to effect a primary
registration within 60 days of such notice. In the ensuing primary
registration, the Holders will have such Piggyback Registration rights as are
set forth in Section 2.02 hereof. Upon the Issuer's preemption of a requested
Demand Registration, such requested registration will not count as a Demand
Registration; provided that a Demand Registration will not be deemed preempted
if the Holders are permitted to sell all requested securities in connection
with the ensuing primary offering by exercising their Piggyback Registration
rights. The Issuer may exercise the right to preempt only twice in any 360-day
period; provided, that during any 360 day period there shall be two periods of
at least 90 consecutive days each during which the Selling Holders may effect a
Demand Registration.
(f) Subject to Section 2.03, the Issuer will be entitled to include in a
Demand Registration shares of Common Stock for its own account or for the
account of other Persons.
Section 2.02. Piggyback Registration. If the Issuer proposes to file a
registration statement under the Securities Act with respect to an offering of
Common Stock for its own account or for the account of another Person (other
than a registration statement on Form S-4 or S-8 or pursuant to Rule 415 (or
any substitute form or rule, respectively, that may be adopted by the
Commission)), the Issuer shall give written notice of such proposed filing to
the Holders at the address set forth in the share register of the Issuer as
soon as reasonably practicable (but in no event less than 10 days before the
anticipated filing date), and such notice shall offer each Holder the
opportunity to register on the same terms and conditions such number of shares
of Registrable Securities as such Holder may request (a "Piggyback
Registration"). Each Holder will have five business days after receipt of any
such notice to notify the Issuer as to whether it wishes to participate in a
Piggyback Registration; provided that should a Holder fail to provide timely
notice to the Issuer, such Holder will forfeit any rights to participate in the
Piggyback Registration with respect to such proposed offering. In the event
that the registration statement is filed on behalf of a Person other than the
Issuer, the Issuer will use its reasonable best efforts to have the shares of
Registrable Securities that the Holders wish to sell included in the
registration statement. If the Issuer shall determine in its sole discretion
not to register or to delay the proposed offering, the Issuer shall provide
written notice of such determination to the Holders and (i) in the case of a
determination not to effect the proposed offering, shall thereupon be relieved
of the obligation to register such Registrable Securities in connection
therewith, and (ii) in the case of a determination to delay a proposed
offering, shall thereupon be permitted to delay registering such Registrable
Securities for the same period as the delay in respect of the proposed
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offering. As between the Issuer and the Selling Holders, the Issuer shall be
entitled to select the Underwriters in connection with any Piggyback
Registration.
Section 2.03. Reduction of Offering. Notwithstanding anything contained
herein, if the managing Underwriter of an offering described in Section 2.01 or
2.02 states in writing that the size of the offering that Holders, the Issuer
and any other Persons intend to make is such that the inclusion of the
Registrable Securities would be likely to materially and adversely affect the
price, timing or distribution of the offering, then the amount of Registrable
Securities to be offered for the account of Holders shall be reduced to the
extent necessary to reduce the total amount of securities to be included in
such offering to the amount recommended by such managing Underwriter (the
"Maximum Offering Size"); provided that in the case of a Piggyback
Registration, if securities are being offered for the account of Persons other
than the Issuer, then the proportion by which the amount of Registrable
Securities intended to be offered for the account of Holders is reduced shall
not exceed the proportion by which the amount of securities intended to be
offered for the account of such other Persons (other than any Person exercising
a demand registration right or any Person requesting to participate in such
offering pursuant to that certain Investor Rights Agreement, dated as of
November 12, 1999, by and between the Issuer and Novell, Inc. (the "Novell
Investor Rights Agreement")) is reduced; provided further that in the case of a
Demand Registration, the amount of Registrable Securities to be offered for the
account of the Holders making the Demand Registration shall be reduced only
after the amount of securities to be offered for the account of the Issuer and
any other Persons has been reduced to zero. In the event of a reduction
pursuant to this Section 2.03 of Registrable Securities to be offered for the
account of Holders, such reduction shall be pro rata among such Holders based
on the number of Registrable Securities each Holder had proposed to sell.
Notwithstanding anything to the contrary contained herein, in the case of a
Piggyback Registration, the amount of Registrable Securities to be offered by
Holders shall be subject to reduction to give full effect to the rights
provided under the Novell Investor Rights Agreement, including, without
limitation, Section 2.5 thereof.
Section 2.04. Preservation of Rights. The Issuer will not grant any
registration rights to third parties which contravene the rights granted
hereunder.
ARTICLE 3
REGISTRATION PROCEDURES
Section 3.01. Filings; Information. In connection with a Demand
Registration pursuant to Section 2.01 hereof, the Issuer will use its
reasonable best efforts to effect, as promptly as is reasonably practicable,
the registration under the Securities Act of (i) all Registrable Securities for
which the requesting Holders have requested registration under Section 2.01(a),
and (ii) subject to the restrictions set forth in Section 2.02 and 2.03, all
other Registrable Securities that any Holders with rights to request
registration under Section 2.01 have requested the Issuer to register by
request received by the Issuer within 15 days after such Holders receive the
Issuer's notice of the Demand Registration. In connection with any such
request:
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(a) The Issuer will expeditiously prepare and file with the Commission a
registration statement on any form for which the Issuer then qualifies and
which counsel for the Issuer shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with
the intended method of distribution thereof, and use its reasonable best
efforts to cause such filed registration statement to become and remain
effective for such period, not to exceed 60 days, as may be reasonably
necessary to effect the sale of such securities; provided that if the Issuer
shall furnish to the requesting Holders a certificate signed by the Issuer's
Chairman, President or any Vice-President stating that in his or her good faith
judgment it would be detrimental or otherwise disadvantageous to the Issuer or
its stockholders for such a registration statement to be filed as expeditiously
as possible (because the sale of Registrable Securities covered by such
registration statement or the disclosure of information in any related
prospectus or prospectus supplement would materially interfere with any
acquisition, financing or other material event or transaction which is then
intended or the public disclosure of which at the time would be materially
prejudicial to the Issuer), the Issuer may postpone the filing or effectiveness
of a registration statement for a period of not more than 90 days on one
occasion in any consecutive 360-day period; and provided further, that if (i)
the effective date of any registration statement filed pursuant to a Demand
Registration would otherwise be at least 45 calendar days, but fewer than 90
calendar days, after the end of the Issuer's fiscal year, and (ii) the
Securities Act requires the Issuer to include audited financials as of the end
of such fiscal year, the Issuer may delay the effectiveness of such
registration statement for such period as is reasonably necessary to include
therein its audited financial statements for such fiscal year.
(b) The Issuer will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to the Selling
Holders, and each applicable managing Underwriter, if any, copies thereof, and
thereafter furnish to the Selling Holders and each such Underwriter, if any,
such number of copies of such registration statement, amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein) and the prospectus included in such registration
statement (including each preliminary prospectus) as the Selling Holders or
each such Underwriter may reasonably request in order to facilitate the sale of
the Registrable Securities by the Selling Holders.
(c) After the filing of the registration statement, the Issuer will
promptly notify the Selling Holders of any stop order issued or, to the
Issuer's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to
remove it if entered.
(d) The Issuer will use its reasonable best efforts to qualify the
Registrable Securities for offer and sale under such other securities or blue
sky laws of such jurisdictions in the United States as the Selling Holders
reasonably request; provided that the Issuer will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.01(d), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.
(e) The Issuer will as promptly as is practicable notify the Selling
Holders, at any time when a prospectus relating to the sale of the Registrable
Securities is required by law to be delivered in connection with sales by an
Underwriter or dealer, of the occurrence of any event or
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prospective event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and promptly make
available to the Selling Holders, and to the Underwriters any such supplement
or amendment. Upon receipt of any notice from the Issuer of the occurrence of
any event of the kind described in the preceding sentence, the Selling Holders
will forthwith discontinue the offer and sale of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until receipt by the Selling Holders and the Underwriters of the copies of such
supplemented or amended prospectus and the Selling Holders will maintain the
confidentiality of, and shall not disclose to any third party, any information
contained in such notice or regarding the existence thereof, provided that the
Selling Holders shall be permitted to disclose such information to their
representatives, affiliates or others to whom they have a contractual
obligation to disclose such information, in each case who agree to be bound by
this confidentiality obligation. In the event the Issuer shall give such
notice, the Issuer shall extend the period during which such registration
statement shall be maintained effective as provided in Section 3.01(a) hereof
by the number of days during the period from and including the date of the
giving of such notice to the date when the Issuer shall make available to the
Selling Holders such supplemented or amended prospectus. Notwithstanding the
foregoing, if the Issuer shall furnish to the Selling Holders a certificate
signed by the Issuer's Chairman, President or any Vice-President stating that
in his or her good faith judgment it would be detrimental or otherwise
disadvantageous to the Issuer to promptly prepare, file and/or distribute a
supplemented or amended prospectus because the disclosure of information in
such prospectus amendment or supplement or sale of Securities covered by the
related registration statement would materially interfere with any acquisition,
financing or other material event which is then intended or the public
disclosure of which at the time would be materially prejudicial to the Issuer,
then the Issuer shall be permitted to delay the preparation, filing and
distribution of such amendment or supplement for a period of up to 30 days,
provided that, in the case of a Demand Registration which has not been
effective for at least 60 days and pursuant to which all the Securities
included therein have not been sold, if such delay exceeds a period of five
business days, the holders of a majority of the Registrable Securities included
in the Demand Registration may notify the Issuer in writing during the delay
period that the Demand Registration is being terminated, in which case the
Issuer shall not be obligated to amend or supplement the prospectus and, for
purposes of Section 2.01 such Demand Registration shall not be deemed to have
occurred.
(f) The Issuer will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of such
Registrable Securities.
(g) At the request of any Underwriter in connection with an underwritten
offering the Issuer will furnish (i) an opinion of counsel, addressed to the
Underwriters, covering such customary matters as the managing Underwriter may
reasonably request and (ii) a comfort letter or comfort letters from the
Issuer's independent public accountants covering such customary matters as the
managing Underwriter may reasonably request.
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(h) The Issuer will make generally available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three 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 the rules and regulations of the
Commission thereunder.
(i) The Issuer will use reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or quoted on
each inter-dealer quotation system on which the Common Stock is then listed or
quoted.
Section 3.02. Selling Holder Information. The Issuer may require Selling
Holders promptly to furnish in writing to the Issuer such information regarding
such Selling Holders, the plan of distribution of the Registrable Securities
and other information as the Issuer may from time to time reasonably request or
as may be legally required in connection with any Demand Registration or
Piggyback Registration.
Section 3.03. Registration Expenses. In connection with any Demand
Registration or Piggyback Registration, the Issuer shall pay the following
expenses incurred in connection with such registration (the "Registration
Expenses"): (i) registration and filing fees with the Commission and the
National Association of Securities Dealers, Inc., (ii) fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) printing expenses, (iv) fees and expenses
incurred in connection with the listing or quotation of the Registrable
Securities, (v) fees and expenses of counsel to the Issuer and the reasonable
fees and expenses of independent certified public accountants for the Issuer
(including fees and expenses associated with the special audits or the delivery
of comfort letters) and (vi) the reasonable fees and expenses of any additional
experts retained by the Issuer in connection with such registration. The
Selling Holders shall pay (i) any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, (ii) fees and expenses of
counsel for the Selling Holders, (iii) any transfer, stamp or similar taxes and
(iv) any out-of-pocket expenses of the Selling Holders.
ARTICLE 4
INDEMNIFICATION AND CONTRIBUTION
Section 4.01. Indemnification by the Issuer. The Issuer agrees to
indemnify and hold harmless each Selling Holder and its Affiliates and their
respective officers, directors, partners, stockholders, members, employees,
agents and representatives and each Person (if any) which controls a Selling
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees) caused
by, arising out of, resulting from or related to any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or any
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preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by or contained in or based upon any
information furnished in writing to the Issuer by or on behalf of such Selling
Holder or any Underwriter expressly for use therein or by the Selling Holder or
Underwriter's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Issuer has
furnished the Selling Holder or Underwriter with copies of the same. The Issuer
also agrees to indemnify any Underwriters of the Registrable Securities, their
officers and directors and each person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Selling
Holders provided in this Section 4.01.
Section 4.02. Indemnification by the Selling Holders. Each Selling Holder
agrees to indemnify and hold harmless the Issuer, its officers and directors,
and each Person, if any, which controls the Issuer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Issuer to each Selling Holder, but
only with reference to information furnished in writing by or on behalf of such
Selling Holder expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Each Selling Holder also agrees to indemnify and
hold harmless any Underwriters of the Registrable Securities, their officers
and directors and each person who controls such Underwriters on substantially
the same basis as that of the indemnification of the Issuer provided in this
Section 4.02.
Section 4.03. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 4.01 or Section 4.02, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request
of the Indemnified Party, shall retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and, in the written
opinion of counsel for the Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties
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from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
Section 4.04. Contribution. If the indemnification provided for in this
Article 4 is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate to
reflect the relative fault of such party in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Issuer, a Selling Holder and the Underwriters 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 such party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Issuer and each Selling Holder agree that it would not be just and
equitable if contribution pursuant to this Section 4.04 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article 4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount
by which the net proceeds of the offering (before deducting expenses) received
by such Selling Holder exceeds the amount of any damages which such Selling
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.
ARTICLE 5
MISCELLANEOUS
Section 5.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such
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party at its address or telecopier number set forth on the signature page
hereof or as provided below, or such other address or telecopier number as such
party may hereinafter specify for the purpose to the party giving such notice.
Each such notice, request or other communication shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified pursuant to this Section 5.01 and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section 5.01.
Any person who becomes a Holder shall provide its address and facsimile
number to the Issuer, which shall promptly provide such information to each
other Holder.
Section 5.02. No Waivers; Amendments.
(a) No failure or delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by all the
parties hereto.
Section 5.03. Participation in Underwritten Registrations. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires,
powers of attorney, custody arrangements, indemnities, underwriting agreements
and other documents reasonably required under the terms of such underwriting
arrangements and this Agreement and (c) furnishes in writing to the Issuer such
information regarding such Person, the plan of distribution of the Registrable
Securities and other information as may be legally required in connection with
such registration.
Section 5.04. Rule 144. The Issuer covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Holders may reasonably request to
the extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of the Purchaser, the Issuer will
deliver to the Purchaser a written statement as to whether it has complied with
such reporting requirements.
Section 5.05. Holdback Agreements. Each Holder agrees, in the event of an
underwritten offering for the Issuer (whether for the account of the Issuer or
otherwise) not to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities or other Common Stock, Class A Preferred or Class B
Preferred, or any securities convertible into or exchangeable or
11
exercisable for any of the foregoing, including any sale pursuant to Rule 144
under the Securities Act (except as part of such underwritten offering), during
the 90-day period (or such lesser period as the lead or managing Underwriter
may agree) beginning on the effective date of the registration statement for
such underwritten offering (or, in the case of an offering pursuant to an
effective shelf registration statement pursuant to Rule 415, the pricing date
for such underwritten offering).
Section 5.06. Holder Determinations. In the event any determination is to
be made by the Holders or the Selling Holders as a group, such determination
shall be made by Holders or Selling Holders holding a majority in interest of
the Registrable Securities or the Registrable Securities being sold,
respectively.
Section 5.07. Orderly Distributions. The Holders will inform the Issuer of
the time and manner of any disposition, in one or a series of related
transactions, of Securities representing more than 1% of the then outstanding
Common Stock. The Holders agree that any disposition of any Securities will be
conducted in a manner that does not unreasonably disrupt the public trading
market for the Common Stock.
Section 5.08. Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon, the parties' respective successors and any
transferee or assignee of Registrable Securities who agrees in writing to be
bound by the terms hereof.
Section 5.09. Counterparts. This Agreement may be executed in any number
of counterparts each of which shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument.
Section 5.10. Specific Enforcement. Each party hereto acknowledges that
the remedies at law of the other parties for a breach or threatened breach of
this Agreement would be inadequate and, in recognition of this fact, any party
to this Agreement, without posting any bond, and in addition to all other
remedies that may be available, shall be entitled to obtain equitable relief in
the form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any equitable remedy that may then be available.
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized signatories as of the date first
above written.
MARCHFIRST, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------
Title: Chief Executive Officer
-------------------------------
Address for notices:
-------------------
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 312/913-6650
Attention: Xxxxx X. Xxxxxx, General Counsel
with a copy to:
Xxxxxx Xxxxxx Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 312/902-1061
Attention: Xxxxxxx X. Xxxxx
and
XxXxxxxxx Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 312/984-3669
Attention: Xxxx X. Xxxxx
FP-LION, L.L.C.
By Francisco Partners, L.P., its Member,
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxx
--------------------------------
Title: Partner
-------------------------------
Address for notices:
-------------------
c/o Francisco Partners, L.P.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxx
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxxxxx
