Exhibit 10.16
REGISTRATION AGREEMENT
AMENDMENT NUMBER 1
THIS AMENDMENT 1 is made as of October 15, 1999 to the Registration
Agreement (the "Agreement") made as of July 7, 1998 among XXXXXX INTERACTIVE
INC., successor to Xxxxxx Black International, Ltd. ("Company"), XXXXXXX MAP
VENTURE CAPITAL FUND III, successor to Xxxxxxx MAP Venture Capital Fund III
Trust ("Xxxxxxx MAP"), BVCF III, L.P., successor to Xxxxxxx Venture Capital Fund
III, L.P. ("Xxxxxxx Venture"), and VIRGINIA RETIREMENT SYSTEM (together with
Xxxxxxx MAP and Xxxxxxx Venture, the "Investors").
The Company, with the consent of the Investors, is creating and
issuing shares of a new class of Class B Convertible Preferred Stock (the "Class
B Preferred Stock"). The purchasers of the Class B Preferred Stock have made a
Registration Agreement between themselves and the Company, and amendment of the
Agreement, a condition of their investment. The Investors are willing to enter
into this Amendment in order to facilitate the investment in Class B Preferred
Stock.
In connection with creation of the Class B Preferred Stock the
Company renamed the existing Preferred Stock "Class A Convertible Preferred
Stock".
The parties hereto agree as follows:
1. All references to "Preferred Stock" in the Agreement shall be deemed to
be references to the Company's Class A Convertible Preferred Stock and the
underlying common stock into which it is convertible.
For purposes of this Amendment, the "Class B Stock" means (i) any Common
Stock issued or issuable upon conversion of the Class B Preferred Stock, (ii)
any equity securities issued or issuable with respect to the securities referred
to in clause (i) by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization, and (iii) any other shares of Common Stock held by persons
holding securities described in clauses (i) or (ii) above. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when they have been distributed to the public pursuant to an offering registered
under the Securities Act or sold to the public through a broker, dealer or
market maker in compliance with Rule 144 under the Securities Act (or any
similar rule then in force). For purposes of this Agreement, a Person shall be
deemed to be a holder of Registrable Securities whenever such Person has the
right to acquire such Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected.
2. With reference to Sections 1(g) and 9(a) of the Agreement, the
Investors hereby consent to the grant of registration rights under the
Registration Agreement to be executed among the Company and the holders of the
Class B Preferred Stock in the form attached hereto as Exhibit A.
3. The last sentence of Section 1(a) is hereby amended to read as follows:
Within ten days after receipt of any such request, the Company shall
give written notice of such requested registration to all other
holders of Registrable Securities and Class B Stock and shall
include in such registration all Registrable Securities and Class B
Stock with respect to which the Company has received written
requests for inclusion therein within 15 business days after the
receipt of the Company's notice (subject to paragraph 1(d) below).
4. Section 1(d) of the Agreement is hereby amended to read as follows:
At the Company's option, the Company may include in any Demand
Registration shares of Common Stock which are not Registrable
Securities to the extent the holders thereof request that such
Common Stock be included in such Demand Registration. If a Demand
Registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the
number of Registrable Securities and, if permitted hereunder, other
securities requested to be included in such offering exceeds the
number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price
range acceptable to the holders of a majority of the Registrable
Securities initially requesting registration, the Company shall
include in such registration, prior to the inclusion of any
securities which are not Registrable Securities and Class B Stock,
the number of Registrable Securities and Class B Stock requested to
be included which in the opinion of such underwriters can be sold in
an orderly manner within the price range of such offering, pro rata
among the respective holders thereof on the basis of the amount of
Registrable Securities and Class B Stock owned by each such holder;
provided, however, that the number of shares of Registrable
Securities and Class B Stock to be included in such registration
shall not be reduced unless all other securities of the Company are
first entirely excluded. Any Persons other than holders of
Registrable Securities who participate in Demand Registrations which
are not at the Company's expense must pay their share of the
Registration Expenses as provided in paragraph 5 hereof.
5. Section 1(f) of the Agreement is hereby amended to read as follows:
(f) Selection of Underwriters. The Company shall have the
right to select the investment banker(s) and manager(s) to
administer the offering, subject to the consent of the holders of a
majority of the Registrable Securities initially requesting
registration hereunder and Class B Stock requesting inclusion in
such registration, taken collectively, which consent may not be
unreasonably withheld or delayed.
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6. Subsection (ii) of Section 2(c) of the Agreement is hereby amended to
read as follows:
(ii) second, the Registrable Securities and shares of Class B Stock
requested to be included in such registration, pro rata among the
holders of such Registrable Securities and shares of Class B Stock
on the basis of the amount of Registrable Securities and shares of
Class B Stock respectively owned by each such holder,
7. Section 2(d) of the Agreement is hereby amended to read as follows:
If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities, and
the managing underwriters advise the Company in writing that in
their opinion the number or dollar amount of securities requested to
be included in such registration exceeds the number or dollar amount
which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such
registration (i) first, the securities requested to be included
therein by the holders requesting such registration (if not the
holders of the Class B Stock or Registrable Securities), the Class B
Stock and the Registrable Securities requested to be included in
such registration, pro rata among the holders of such securities on
the basis of the amount of securities owned by each such holder, and
(ii) second, all other securities requested to be included in such
registration.
8. Section 2(e) of the Agreement is hereby amended to read as follows:
If any Piggyback Registration is an underwritten offering, the
selection of investment banker(s) and manager(s) for the offering
must be approved by the holders of a majority of the Registrable
Securities and Class B Stock, taken collectively, included in such
Piggyback Registration. Such approval shall not be unreasonably
withheld or delayed.
9. Section 3(a) of the Agreement is hereby amended to read as follows:
Each holder of Registrable Securities shall not effect any public
sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into
or exchangeable or exercisable for such securities, during the seven
days prior to and the 120-day period beginning on the effective date
of any underwritten Demand Registration in which Registrable
Securities are included (except as part of such underwritten
registration), unless the underwriters managing the registered
public offering otherwise agree.
10. All other terms of the Agreement shall remain unchanged and in full
force and effect.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered by their duly authorized representatives as of the date first
above written.
XXXXXX INTERACTIVE INC.
By: /s/ Xxxxxx X. Black
------------------------------------
Title: Chief Executive Officer
XXXXXXX TRUST COMPANY, as Trustee for the
XXXXXXX MAP VENTURE CAPITAL FUND III
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Assistant Trust Officer
Xxxxxxx Trust Company
BVCF III, L.P.
By: X.X. Xxxx Associates, LLC, its General Partner
By: Xxxxxxx Venture Management, LLC, its
Attorney-in-fact
By: By: Xxxxxxx Partners, Inc., its Managing
Member
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Executive Director
VIRGINIA RETIREMENT SYSTEM
By: Xxxxxxx Partners, Inc. under Power of Attorney
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Executive Director
Xxxxxxx Partners, Inc.
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EXHIBIT A
FORM OF REGISTRATION AGREEMENT
REGISTRATION AGREEMENT
THIS AGREEMENT is made as of October __, 1999, among XXXXXX INTERACTIVE
INC., a Delaware corporation (the "Company") and ______________ (collectively,
the "Investors").
The Investors and the Company are parties to an Investment Agreement of
even date herewith (the "Investment Agreement") pursuant to which the Investors
have purchased or contemporaneously herewith are purchasing Class B Stock of the
Company. In order to induce the Investors to enter into the Investment Agreement
the Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Investment Agreement. Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 8 hereof.
The parties hereto hereby agree as follows:
1. DEMAND REGISTRATIONS.
(a) Requests for Registration. The Requisite Holders may request
registration under the Securities Act of all or any portion of their Registrable
Securities on Form S-1 or any similar long-form registration ("Long-Form
Registrations"), or, if available, on Form S-2 or S-3 or any similar short-form
registration ("Short Form Registrations"). All registrations requested pursuant
to this paragraph 1(a) are referred to herein as "Demand Registrations." Each
request for a Demand Registration shall specify the approximate number of
Registrable Securities requested to be registered and the anticipated per share
price range for such offering. Within ten days after receipt of any such
request, the Company shall give written notice of such requested registration to
all other holders of Registrable Securities and Conversion Shares and shall
include in such registration all Registrable Securities and Conversion Shares
with respect to which the Company has received written requests for inclusion
therein within 15 business days after the receipt of the Company's notice
(subject to paragraph 1(d) and 2(d) below).
(b) Long Form Registrations. The Requisite Holders shall be entitled to
request, and the Company shall be obligated to effect, (i) one Long-Form
Registration in which the Company shall pay all Registration Expenses ("Company
Paid Long Form Registration"), and (ii) unlimited Long-Form Registrations in
which the holders of Registrable Securities shall pay the Registration Expenses
other than the Internal Expenses (as defined in Section 5 hereof). A
registration shall not count as one of the permitted Long-Form Registrations
until it has become effective, and a Company-paid Long Form Registration shall
not count as one of the permitted Company-paid Long-Form Registrations unless
the holders of Registrable Securities are able to register and sell at least 90%
of the Registrable Securities requested to be included in such
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registration; provided that in any event the Company shall pay all Registration
Expenses in connection with any registration initiated as a Company-paid
Long-Form Registration whether or not it has become effective and whether or not
such registration has counted as one of the permitted Company-paid Long-Form
Registrations. All Long-Form Registrations shall be underwritten registrations.
(c) Short Form Registrations. In addition to the Long-Form Registrations
provided pursuant to paragraph 1(b), the Requisite Holders shall be entitled to
request, and the Company shall be obligated to effect, (i) two Short-Form
Registrations in which the Company shall pay all Registration Expenses, and (ii)
unlimited short-form registrations in which the Requisite Holders shall pay the
Registration Expenses other than the Internal Expenses (as defined in Section 5
hereof). Demand Registrations shall be Short-Form Registrations whenever the
Company is permitted to use any applicable short form. In the event that both
Company-paid Short-Form Registrations have been used and the Company-paid
Long-Form Registration has not been used, the Company shall (upon a request for
a Demand Registration by the Requisite Holders) have the option of paying all
Registration Expenses in connection with a third Short-Form Registration or of
affecting the Company-paid Long-Form Registration. After the Company has become
subject to the reporting requirements of the Securities Exchange Act, the
Company shall use its best efforts to qualify for Short-Form Registrations on
Form S-3.
(d) Priority on Demand Registrations. At the Company's option, the Company
may include in any Demand Registration shares of Common Stock (including the
Conversion Shares) which are not Registrable Securities to the extent the
holders thereof request that such Common Stock be included in such Demand
Registration. If a Demand Registration is an underwritten offering and the
managing underwriters advise the Company in writing that in their opinion the
number of Registrable Securities and, if permitted hereunder, other securities
requested to be included in such offering exceeds the number of Registrable
Securities and other securities, if any, which can be sold in an orderly manner
in such offering within a price range acceptable to the Requisite Holders
initially requesting registration, the Company shall include in such
registration, prior to the inclusion of any securities which are not Registrable
Securities and Conversion Shares, the number of Registrable Securities and
Conversion Shares requested to be included which in the opinion of such
underwriters can be sold in an orderly manner within the price range of such
offering, pro rata among the respective holders thereof on the basis of the
amount of Registrable Securities and Conversion Shares owned by each such
holder; provided, however, that the number of shares of Registrable Securities
to be included in such registration shall not be reduced unless all other
securities of the Company except the Conversion Shares are first entirely
excluded. Any Persons other than holders of Registrable Securities who
participate in Demand Registrations which are not at the Company's expense must
pay their share of the Registration Expenses as provided in paragraph 5 hereof.
(e) Restrictions on Long-Form Registrations. The Company shall not be
obligated to effect any Long-Form Registration before the earlier to occur of
(i) the date twelve months after the date of this Agreement, or (ii) 180 days
after the effective date of the
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earlier of a previous Long-Form Registration or Initial Public Offering. The
Company may postpone for up to 90 days the filing or the effectiveness of a
registration statement for a Demand Registration if the Company and the holders
of a majority of the Registrable Securities and Conversion Shares, taken
collectively, agree that such Demand Registration would reasonably be expected
to have a material adverse effect on any proposal or plan by the Company or any
of its Subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer,
reorganization or similar transaction; provided that in such event, the holders
of Registrable Securities initially requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such Demand
Registration shall not count as the permitted Demand Registration hereunder and
the Company shall pay all Registration Expenses in connection with such
registration. The Company may delay a Demand Registration hereunder only once in
any twelve-month period.
(f) Selection of Underwriters. The Requisite Holders shall have the right
to select the investment banker(s) and manager(s) to administer the offering,
subject to the consent of the Company, which consent may not be unreasonably
withheld or delayed.
2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Company proposes to register any of
its securities under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice to all holders of Registrable Securities of its
intention to effect such a registration and shall include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 20 days after the receipt of the
Company's notice (subject to Sections 2(c) and (d) below).
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number or
dollar amount of securities requested to be included in such registration
exceeds the number or dollar amount which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such registration (i) first, the securities the Company proposes to sell,
(ii) second, the Registrable Securities and Conversion Shares requested to be
included in such registration, pro rata among the holders of such Registrable
Securities and Conversion Shares on the basis of the amount of Registrable
Securities and Conversions Shares respectively owned by each such holder, and
(iii) third, other securities requested to be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Company's
securities, and
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the managing underwriters advise the Company in writing that in their opinion
the number or dollar amount of securities requested to be included in such
registration exceeds the number or dollar amount which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company shall include in such registration: (i) first, if such registration is
requested by the holders of Registrable Securities or Conversion Shares, the
Registrable Securities and Conversion Shares requested to be included therein,
pro rata among the holders of such securities on the basis of the amount of
securities owned by each such holder, and (ii) second, the securities requested
to be included therein by the holders requesting such registration (if not the
holders of the Conversion Shares or Registrable Securities), the Conversion
Shares, and the Registrable Securities requested to be included in such
registration, pro rata among the holders of such securities on the basis of the
amount of securities owned by each such holder, and (ii) third, all other
securities requested to be included in such registration.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering must be approved by the holders of a majority of the Registrable
Securities and Conversion Shares, taken collectively, included in such Piggyback
Registration. Such approval shall not be unreasonably withheld or delayed.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities, until
a period of at least 180 days has elapsed from the effective date of such
previous registration.
3. HOLDBACK AGREEMENTS.
(a) Holdback by Holders. Each holder of Registrable Securities shall not
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 120-day period beginning on the effective date of any underwritten
Demand Registration in which Registrable Securities are included (except as part
of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(b) Company Limitation. The Company shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 180-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or
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pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree.
4. REGISTRATION PROCEDURES.
Whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
shall use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed);
(b) notify each holder of Registrable Securities of the effectiveness of
each registration statement filed hereunder and prepare and file with the
Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 180 days and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of copies
of such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall 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 subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
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(e) notify each seller of such Registrable Securities, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any material fact necessary to make the statements therein not
misleading, and, at the request of any such seller, the Company shall prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such registrable Securities, such prospectus shall not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are then listed and,
if not so listed, to be listed on the NASD automated quotation system and, if
listed on the NASD automated quotation system, use its best efforts to secure
designation of all such Registrable Securities covered by such registration
statement as a NASDAQ "national market system security" within the meaning of
Rule 11Aa21of the Securities and Exchange Commission or, failing that, to secure
NASDAQ authorization for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split or a combination of
shares);
(i) make available for inspection by any seller of Registrable Securities,
any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with the Securities Act, the
Securities Exchange Act, all applicable rules and regulations of the Securities
and Exchange Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and
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(k) permit any holder of Registrable Securities which holder, in its sole
and exclusive judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such holder and
its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(m) use its best efforts to cause such Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities; and
(n) obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters as the holders of a majority of the Registrable
Securities being sold reasonably request (provided that such Registrable
Securities constitute at least 10% of the securities covered by such
registration statement).
5. REGISTRATION EXPENSES.
(a) Company Expenses. All expenses incident to the Company's performance
of or compliance with this Agreement, including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, fees and
disbursements of custodians, and fees and disbursements of counsel for the
Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons retained by the Company
(all such expenses being herein called "Registration Expenses"), shall be borne
as provided in this Agreement, except that the Company shall, in any event, pay
its internal expenses ("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 or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASD automated
quotation system.
(b) In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration.
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(c) To the extent Registration Expenses are not required to be paid by the
Company, each holder of securities included in any registration hereunder shall
pay those Registration Expenses allocable to the registration of such holder's
securities so included, and any Registration expenses not so allocable shall be
borne by all sellers of securities included in such registration in proportion
to the aggregate selling price of the securities to be so registered.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company shall indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder shall furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing and executed by such holder; provided that the obligation
to indemnify shall be individual, not joint and several, for each holder and
shall be limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification (provided that the failure to give prompt notice shall not
impair any Person's right to indemnification hereunder to the extent such
failure has not prejudiced
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the indemnifying party) and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party shall not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent shall not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim shall not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities. The Company also
agrees to make such provisions, as are reasonably requested by any indemnified
party, for contribution to such party in the event the Company's indemnification
is unavailable for any reason. Such indemnification shall remain effective from
the date of this Agreement to and including the termination of the applicable
statute of limitations (plus 60 days).
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
8. DEFINITIONS.
"Class A Stock" means the outstanding Class A Preferred Stock of the
Company, par value $.001.
"Class B Stock" means the outstanding Class B Preferred Stock of the
Company, par value $.001.
"Conversion Shares" means shares of the Common Stock of the Company
resulting from conversion of the Class A Stock.
"Initial Public Offering" means any offering by the Company (or any other
holder) of common stock of the Company to the public pursuant to an effective
registration statement under the Securities Act, as then in effect, or any
comparable statement under any similar federal statute then in force.
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"Registrable Securities" means (i) any Common Stock issued or issuable
upon conversion of the Class B Stock, (ii) any equity securities issued or
issuable with respect to the securities referred to in clause (i) by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, and (iii) any
other shares of Common Stock held by persons holding securities described in
clauses (i) or (ii) above (including without limitation any shares of Common
Stock issued to the Investor under the research Agreement between the Company
and the Investor dated the date hereof. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been distributed to the public pursuant to a offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force). For purposes of this Agreement, a Person shall be deemed to be a holder
of Registrable Securities whenever such Person has the right to acquire such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected. For purposes of any consent or approval required
hereunder, only the Registrable Securities falling within clauses (i) and (ii)
above shall be counted.
"Requisite Holders" means the holders of forty percent (40%) or more of
the outstanding Registrable Securities.
Unless otherwise stated, other capitalized terms contained herein have the
meanings set forth in the Investment Agreement.
9. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company shall not hereafter enter into
any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
(b) Adjustments Affecting Registrable Securities. The Company shall not
take any action, or permit any change to occur, with respect to its securities
which would adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in a registration undertaken
pursuant to this Agreement or which would adversely affect the marketability of
such Registrable Securities in any such registration (including, without
limitation, effecting a stock split or a combination of shares which would have
such an adverse effect).
(c) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction
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(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of seventy-five percent (75%) of the
Registrable Securities.
(e) Successors and Assigns. All covenants and agreements in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not. In addition, whether or not any express assignment has been
made, the provisions of this Agreement which are for the benefit of purchasers
or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(f) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(i) Governing Law. Issues and questions concerning the construction,
validity, interpretation and enforcement of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York; provided, however, that the
matters contained herein that fall specifically within the purview of the
General Corporation Law of the State of Delaware shall be governed thereby.
(j) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable overnight courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the addresses indicated below:
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To the Investors:
with copies to:
to the Company:
Xxxxxx Interactive, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
with copies to:
Xxxxxx Beach & Xxxxxx LLP
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, X.X. 00000-0000
Attn: Xxxx Xxx Xxxxxxx
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
IN WITNESS WHEREOF, the parties have executed this Registration Agreement
as of the date first written above.
XXXXXX INTERACTIVE INC.
By:
------------------------------------
Title:
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[Signature of Investor]
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