EXHIBIT 10.27
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the 28th
day of August, 2001, by and among Infonautics, Inc., a Pennsylvania corporation
(the "Company"), and the investors listed on Exhibit A hereto, referred to
hereinafter as the "Investors" and each individually as an "Investor."
W I T N E S S E T H
WHEREAS, the Investors hold shares of capital stock of Tucows Inc., a
Delaware corporation ("Tucows");
WHEREAS, the Company, Tucows and TAC Merger Sub Corporation, a Delaware
corporation, have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of March 27, 2001;
WHEREAS, under the Merger Agreement, Tucows and TAC will merge and Tucows
will become a direct wholly-owned subsidiary of the Company and the Company will
issue approximately 60,054,100 shares of its Common Stock, no par value ("Common
Stock"), and options in exchange for all outstanding capital stock and options
of Tucows;
WHEREAS, under the Merger Agreement, the Company has agreed to enter into a
registration rights agreement with the Investors to grant them certain
registration rights with respect to the shares of Common Stock acquired by them
pursuant to the terms of the Merger Agreement; and
WHEREAS, the parties desire to enter into this Agreement in order to grant
the registration rights to the Investors as set forth below;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree hereto as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the
SEC.
(c) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.13 hereof.
(d) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
(e) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the Common Stock
issuable to the Investors pursuant to the terms of the Merger Agreement,
(ii) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of the shares referenced in (i) above, and (iii) the
Common Stock issuable to certain Investors pursuant to the terms of that
certain Escrow Agreement, dated as of August 21, 2001, between Tucows and
the stockholders of Tucows. 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, any securities
sold in a private transaction in which the transferor's rights under
Section 1 of this Agreement are not assigned, or any securities that may be
sold pursuant to Rule 144(k) under the Securities Act. In addition,
Registrable Securities shall not include any Registrable Securities held by
and issuable to any Holder, and all registration rights with respect
thereto shall terminate, if all Registrable Securities held by or issuable
to such Holder may be sold under Rule 144 during any ninety period without
limitation as to volume.
(g) The number of shares of "Registrable Securities then outstanding"
at any time shall be the number of shares determined by calculating the
total number of shares of the Company's Common Stock that are Registrable
Securities and either (a) are then issued and outstanding or (b) are
issuable pursuant to then exercisable or convertible securities.
(h) The term "SEC" shall mean the Securities and Exchange Commission.
1.2 REQUEST FOR REGISTRATION.
(a) Subject to the conditions of this Section 1.2, if the Company shall
receive, at any time following the date that is three (3) months after the date
of this Agreement, a written request from any Holder or Holders (the "Initiating
Holders") that the Company file a registration statement under the Act, then the
Company shall, within thirty (30) days of the receipt thereof,
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give written notice of such request to all Holders (the "Demand Notice"), and
subject to the limitations of this Section 1.2, file, as soon as practicable,
and in any event within sixty (60) days of the receipt of such request, a
registration statement under the Act covering all Registrable Securities with
respect to which the Company has received written requests for inclusion within
fifteen (15) days after the Company has given the Demand Notice.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to Subsection 1.2(a)
and the Company shall include such information in the Demand Notice. The
underwriter will be selected by the Company and shall be reasonably acceptable
to the Initiating Holders. In such event, the right of any Holder to include his
or its Registrable Securities in such registration shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in Subsection 1.4(e))
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Section 1.2, if the underwriter advises the Company that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company 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 held by all such Holders (including the Initiating Holders);
PROVIDED, HOWEVER, that the number of shares of Registrable Securities to be
included in such underwriting and registration shall not be reduced unless all
other securities of the Company are first entirely excluded from the
underwriting and registration. Any Registrable Securities excluded or withdrawn
from such underwriting shall be withdrawn from the registration.
(c) Notwithstanding the foregoing, if the Company shall furnish to the
Holders requesting a registration pursuant to this Section 1.2, a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than 120 days after receipt
of the request of the Initiating Holders; provided, however, that the Company
may not utilize this right more than once in any twelve (12) month period.
(d) Notwithstanding the foregoing, the Company shall not be obligated to
effect any such registration pursuant to this Section 1.2 if: (i) Holders
requesting a registration statement pursuant to this Section 1.2, propose to
sell Registrable Securities at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $10 million; (ii) if the
Company has, within the twelve (12) month period preceding the Initiating
Holders written request contemplated by Subsection 1.2(a), already effected two
(2) registrations for the Holders
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pursuant to this Section 1.2; or (iii) in any particular jurisdiction which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration.
(e) In addition, the Company shall not be obligated to effect, or to take
any action to effect, any registration pursuant to this Section 1.2:
(i) during the period starting with the date sixty (60) days prior to
the Company's good faith estimate of the date of filing of, and ending on a
date one hundred eighty (180) days after the effective date of, a
registration contemplated by Section 1.3 hereof; provided that the Company
is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(ii) if the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below.
1.3 COMPANY REGISTRATION.
(a) If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its stock or other securities under
the Act in connection with the public offering of such securities solely for
cash (other than a registration relating solely to the sale of securities to
participants in a Company stock plan, a registration on Form S-3 or on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities to the public or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 2.5, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1 to effect
the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best 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 a period of up to one hundred twenty (120)
days or until the distribution contemplated in the Registration Statement
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has been completed; provided, however, that (i) such 120-day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Act, permits an offering on a continuous or delayed
basis, and provided further that applicable rules under the Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section
10(a)(3) of the Act, or (II) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the 1934 Act in the registration statement.
(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
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders; provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter 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 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.
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(g) Cause all such Registrable Securities registered pursuant hereunder to
be listed on each securities exchange on which similar securities issued by the
Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant to this Agreement and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, 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 such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities, and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
1.5 FURNISH INFORMATION. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
1.6 EXPENSES OF DEMAND REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company (including fees and disbursements
of counsel for the Company in its capacity as counsel to the selling Holders
hereunder, or if Company counsel does not make itself available for this
purpose, the reasonable fees and disbursements of one counsel for the selling
Holders) will be paid by the Company; provided, however, that the Company shall
not be required to pay for any expenses of any registration proceeding begun
pursuant to Section 1.2 if the registration request is subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expense)
unless at the time of such withdrawal, the Holders have learned of a material
adverse change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the request
with reasonable promptness following disclosure by the Company of such material
adverse change (whereupon the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 1.2).
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1.7 EXPENSES OF COMPANY REGISTRATION. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.3 for each Holder (which right may be assigned as provided in Section 1.13),
including (without limitation) all registration, filing, and qualification fees,
printers and accounting fees relating or apportionable thereto and the fees and
disbursements of counsel for the Company in its capacity as counsel to the
selling Holders hereunder (provided that, if Company counsel does not make
itself available for this purpose, the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders selected by them), but
excluding underwriting discounts and commissions relating to such Registrable
Securities.
1.8 UNDERWRITING REQUIREMENTS. In connection with any offering involving an
underwriting of shares of the Company's capital stock or other securities, the
Company shall not be required under Section 1.3 to include any Holder's
Registrable Securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (or by other persons entitled to select the underwriters), and then only in
such quantity as the underwriters determine, in their sole discretion, will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of securities to be sold (in
addition to those securities to be sold by the Company) that the underwriters
determine in their sole discretion is compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters determine in their sole discretion will not jeopardize the success
of the offering (the securities so included to be apportioned pro rata among the
selling shareholders according to the total amount of securities entitled to be
included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders).
1.9 DELAY OF REGISTRATION. 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 1.
1.10 INDEMNIFICATION. In the event any Registrable Securities are included in a
registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, any underwriter (as defined in the Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Act or the 1934 Act, against losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
or the 1934 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"): (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
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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 Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, or the 1934 Act or any state securities law; and the
Company will pay to each such Holder, underwriter or controlling person, as
incurred, 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
Subsection 1.10(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld)
and the Company shall not 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
any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter, any other person selling
securities in such registration statement and any controlling person of any such
underwriter or other securityholder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become
subject under the Act, or the 1934 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 expressly for use in connection
with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Subsection 1.10(b), in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Subsection 1.10(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) and provided further that in
no event shall any indemnity under this Subsection 1.10(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 1.10
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 1.10, 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 notified,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, where representation of such indemnified
party(s) by the counsel
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retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party(s) and the
indemnifying party. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to such indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined 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.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
(f) The obligations of the Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 REPORTS UNDER THE 1934 ACT. With a view to making available to the Holders
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the
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reporting requirements of SEC Rule 144, the Act and the 1934 Act, or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 FORM S-3 REGISTRATION. In case the Company shall receive from any Holder or
Holders a written request or requests that the Company effect a registration on
Form S-3 and any related qualification or compliance with respect to all or a
portion of the Registrable Securities owned by such Holder or Holders, the
Company will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; 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 the 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 Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.12: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $250,000; (3) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 60 days after receipt of
the request of the Holder or Holders under this Section 1.12; provided, however,
that the Company shall not utilize this right more than once in any twelve (12)
month period; (4) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two registrations on Form
S-3 for the Holders pursuant to this Section 1.12; or (5) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
as soon as practicable after receipt of the request of the Holders. All expenses
incurred in connection with a registration requested pursuant to Section 1.12,
including (without limitation) all registration, filing, qualification,
printer's and accounting fees and the reasonable fees and disbursements of
counsel for the selling
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Holder or Holders and counsel for the Company, but excluding any underwriters'
discounts or commissions associated with such disposition of Registrable
Securities and other securities, shall be paid by the Company.
1.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be assigned (but
only with all related securities), provided: (a) the Company is, within a
reasonable time after such transfer, furnished with 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; (b) such transferee or
assignee agrees in writing to be bound by and subject to the terms and
conditions of this Agreement, including without limitation the provisions of
Section 1.15 below; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
1.14 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that, during the
period of duration specified by the Company and an underwriter of Common Stock
or other securities of the Company, following the effective date of a
registration statement of the Company filed under the Act, it shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except Common Stock included in such
registration; provided, however, that:
(a) such agreement shall be applicable only to the first two such
registration statements of the Company after the date of this Agreement which
covers Common Stock (or other securities) to be sold on its behalf to the public
in an underwritten offering; and
(b) all officers and directors of the Company and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements; and
(c) such market stand-off time period shall not exceed one hundred eighty
(180) days.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this Section
1.14 shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms which may be promulgated in the future,
or a registration relating solely to a SEC Rule 145 transaction on Form S-4 or
similar form which may be promulgated in the future.
1.15 TERMINATION OF REGISTRATION RIGHTS.
11
(a) No Holder shall be entitled to exercise any right provided for in this
Section 1 after August 28, 2005.
(b) In addition, the right of any Holder to request registration or
inclusion in any registration pursuant to Section 1.3 shall terminate on the
closing of the first Company-initiated registered public offering of Common
Stock of the Company if all Registrable Securities held or entitled to be held
upon conversion by such Holder may immediately be sold under Rule 144 during any
90-day period, or on such date after the closing of the first Company-initiated
registered public offering of Common Stock of the Company as all Registrable
Securities held or entitled to be held upon conversion by such Holder may
immediately be sold under Rule 144 during any 90-day period; provided, however,
that the provisions of this Section 1.15(b) shall not apply to any Holder who
owns more than two percent (2%) of the Company's outstanding stock until such
time as such Holder owns less than two percent (2%) of the outstanding stock of
the Company.
2. MISCELLANEOUS.
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties (including transferees of
Registrable Securities). Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
2.2 GOVERNING LAW. This Agreement shall be governed by and construed under the
laws of the Commonwealth of Pennsylvania as applied to agreements among
Pennsylvania residents entered into and to be performed entirely within
Pennsylvania.
2.3 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
2.4 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
2.5 NOTICES. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or upon deposit with the
United States Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties.
12
2.6 EXPENSES. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
2.7 AMENDMENTS AND WAIVERS. This Agreement may be amended or modified only upon
the written consent of the Company and the holders of at least a majority of the
Registrable Securities, and any such amendment or modification shall be binding
upon each Holder who did not consent in writing thereto; provided that any
amendment or modification which materially and adversely affects the rights of
any Holder in a manner that is materially different from any other Holder shall
require the written consent of such adversely affected Holder. Except as
otherwise expressly provided, the obligations of the Company and the rights of
the Holders under this Agreement may be waived only with the written consent of
the holders of at least a majority of the Registrable Securities, and any such
waiver shall be binding upon each Holder who did not consent in writing thereto;
provided that any waiver which materially and adversely affects the rights of
any Holder in a manner that is materially different from any other Holder shall
require the written consent of such adversely affected Holder. For the purposes
of determining the number of Holders or Investors entitled to vote or exercise
any rights hereunder, the Company shall be entitled to rely solely on the list
of record holders of its stock as maintained by or on behalf of the Company.
2.8 SEVERABILITY. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
2.9 AGGREGATION OF STOCK. All Registrable Securities held or acquired by
affiliated entities or persons any Holder shall be aggregated together with the
Registrable Securities held by such Holder for the purpose of determining the
availability of any rights under this Agreement, and such affiliated entities or
persons and such Holder shall be deemed to be one Holder for all purposes.
2.10 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INFONAUTICS, INC.
By: /s/ Xxx Xxxxxx
----------------------------------------
Name: Xxx Xxxxxx
--------------------------------------
Title: Chief Executive Officer and President
-------------------------------------
ADDRESS:
000 Xxxxx Xxxxx Xxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
XXXXXX HOLDING CORP.
By: /s/ X. Xxxxxxxxxx
----------------------------------------
Name: X. Xxxxxxxxxx
--------------------------------------
Title: Attorney in Fact
-------------------------------------
ADDRESS:
c/o ONYX Financial Advisors SA
25, Xxxx Xxx Xxxx
Xxxxxxx 0000
Xxxx Xxxxx, Batiment Aerogare Fret
1211 Xxxxxx 0, Xxxxxxxxxxx
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
--------------------------------------
ADDRESS:
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx, 00000
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
XXXXX INC.
By: /s/ X. Xxxxxxxxxx
----------------------------------------
Name: X. Xxxxxxxxxx
--------------------------------------
Title: Attorney in Fact
-------------------------------------
ADDRESS:
c/o ONYX Financial Advisors SA
25, Xxxx Xxx Xxxx
Xxxxxxx 0000
Xxxx Xxxxx, Batiment Aerogare Fret
1211 Xxxxxx 0, Xxxxxxxxxxx
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
POALIM NECHASIM (MENAYOT) LTD.
By: /s/ Xxxxx Elinav /s/ Zali Guter
----------------------------------------
Name: Xxxxx Elinav Zali Guter
--------------------------------------
Title:
-------------------------------------
ADDRESS:
00 Xxxxxxxxxx Xxxx.
Xxx Xxxx, Xxxxxx
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
EUROCOM COMMUNICATIONS LTD.
By: /s/ Xxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxx
--------------------------------------
Title: Chairman
-------------------------------------
ADDRESS:
2 Xxx Xxxxxxxx Xx.
Xxxxx-Xxx, 00000
Xxxxxx
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
XDL U.S. HOLDINGS INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Title: A.S.O.
-------------------------------------
ADDRESS:
00 Xx. Xxxxx Xxxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Xxxxxx
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
FIBI INVESTMENT HOUSE LTD.
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
--------------------------------------
Title: C.E.O.
-------------------------------------
ADDRESS:
Xxxxxx Xxxxx
0 Xxxx Xx'xx Xxxxxx
Xxx Xxxx 00000, Xxxxxx
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
STI VENTURES N.V.
By: /s/ X.X. Xxxxx
----------------------------------------
Name: X.X. Xxxxx
--------------------------------------
Title: Director
-------------------------------------
ADDRESS:
c/o STI Ventures Advisors (Israel) Ltd.
Herzlia Business Park
85 Medinat Xxxxxxxxx St., 13th Floor
Herzlyiah Pituah, 46140, Israel
ADDITIONAL SIGNATURE PAGE TO THE REGISTRATION RIGHTS AGREEMENT
The undersigned, being one of the Investors identified in the Agreement,
has executed this Agreement as of the date first above written.
SCORPIO COMMUNICATIONS LTD.
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
--------------------------------------
Title: C.F.O.
-------------------------------------
ADDRESS:
c/o STI Ventures Advisors (Israel) Ltd.
Herzlia Business Park
85 Medinat Xxxxxxxxx St., 13th Floor
Herzlyiah Pituah, 46140, Israel
EXHIBIT A
LIST OF INVESTORS
1. Xxxxxx Holding Corp.
2. Xxxxx Xxxxx
3. Xxxxx Inc.
4. Poalim Nechasim (Menayot) Ltd.
5. Eurocom Communications Ltd.
6. XDL U.S. Holdings Inc.
7. FIBI Investment House Ltd.
8. STI Ventures N.V.
9. Scorpio Communications Ltd.
