Exhibit 4.3.2
ETINUUM, INC.
A Delaware Corporation
(formerly Intek Information, Inc.)
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
Dated as of March 20, 2000
Prepared by Xxxxxxxx, Xxxxx & Xxxxxxx, P.C., 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx, 00000
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is made as of March 20, 2000, by and between ETINUUM, INC., formerly Intek
Information Inc., a Delaware corporation (the "Company") and the undersigned
owners of certain capital stock of the Company.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company entered into a Stock Purchase Agreement dated October
30, 1999 ("Purchase Agreement") with Acorn Information Services, Inc., a
Delaware corporation ("Acorn"), and the owners of all of the outstanding capital
stock of Acorn (the "Acorn Shareholders") pursuant to which the Company agreed
to issue certain shares of Common Stock to Prospero LLC., a Connecticut limited
liability company, ("Prospero") on behalf of Acorn in consideration for certain
services performed for Acorn in connection with the transactions contemplated by
the Purchase Agreement;
WHEREAS, the Company, Acorn and the Acorn Shareholders amended the Purchase
Agreement in that certain Amended and Restated Share Purchase Agreement entered
into as of the date hereof;
WHEREAS, pursuant to this Amended and Restated Registration Rights
Agreement, the Company, the Acorn Shareholders and Prospero desire to amend the
Registration Rights Agreement entered into by and among them on October 30, 1999
(the "Registration Rights Agreement"), as amended in Amendment No. 2 to
Registration Rights Agreement to be effective upon the closing of the initial
public offering of the Company's common stock, to reflect certain changes made
in the Amended and Restated Share Purchase Agreement; and
WHEREAS, the Company, the Acorn Shareholders and Prospero intend that this
Amended and Restated Registration Rights Agreement supercede and replace in its
entirety the Registration Rights Agreement and all amendments thereto.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
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ARTICLE I
DEFINITIONS
1.1 As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
"Affiliate" means (i) with respect to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, (ii) with respect to any natural Person,
shall also mean the spouse, sibling, child, step-child, grandchild, niece,
nephew or parent of such Person, or the spouse thereof, (iii) the estate of a
Shareholder or Affiliate, (iv) any trust created for the benefit of an Acorn
Shareholder or by an Acorn Shareholder for an Affiliate of such Acorn
Shareholder specified in clause (ii), and (v) with respect to any Person, any
general partner or limited partner of such Person.
"Common Stock" means the Common Stock, $.0001 par value per share, of the
Company and any equity securities of the Company issued or issuable with
respect to the Common Stock in connection with a reclassification,
recapitalization, stock combination, stock dividend payable in stock of the
Company, merger, consolidation or other reorganization.
"Holder" or "Holders" means any party who is a signatory to this Agreement
and any party who shall hereafter acquire and hold Registrable Securities.
"IPO" means the initial underwritten offering of the Common Stock pursuant
to an effective registration statement under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
"Other Registrable Securities" mean those securities defined in each of the
Other Registration Rights Agreements as "Registrable Securities."
"Other Registration Rights Agreements" means that certain Amended and
Restated Registration Rights Agreement dated as of January 14, 2000 by and
between the Company and The Beacon Group III - Focus Value Fund, L.P., Squam
Lake Investors II, L.P., Xxxx & Company, Inc., Xxxx & Company Inc., Conning
Capital Limited Partnership V, U.S. Information Technology Financing, L.P.,
Encompass Group, Inc., Trans Cosmos USA, Inc., BCVF IV, L.P., Xxxxxxx X'Xxxxxxx,
Xxxx Xxxxxx, Xxxxx Xxxxxxxx and certain other parties thereto.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
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"Registrable Securities" means any (i) Common Stock issued or issuable to
Prospero under the Amended and Restated Share Purchase Agreement, and (ii)
shares of Common Stock issued or issuable, directly or indirectly, with respect
to the Common Stock referenced in clause (i) above by way of any stock split,
stock dividend payable in the capital stock of the Company, recapitalization or
combination of shares. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, or (ii) such securities shall
have been sold (other than in a privately negotiated sale) pursuant to Rule 144
(or any successor provision) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
ARTICLE II
REGISTRATION RIGHTS
2.1 Piggyback Registrations.
2.1.1 Piggyback Registrations. If, at any time, the Company proposes or
is required to register any of its equity securities under the Securities Act
(other than pursuant to registrations on such form or similar form(s) solely for
registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or acquisition) on a
registration statement on Form S-1, Form S-2 or Form S-3 (or an equivalent
general registration form then in effect), whether or not for its own account,
the Company shall give prompt written notice of its intention to do so to
Prospero. Upon the written request of Prospero, made within 15 days following
the receipt of any such written notice (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by Prospero and the
intended method of distribution thereof), the Company shall use its best efforts
to cause all such Registrable Securities, of which Prospero has so requested the
registration, to be registered under the Securities Act (with the securities
that the Company at the time it proposes to register) to permit the sale or
other disposition by Prospero (in accordance with the intended method of
distribution thereof) of the Registrable Securities to be so registered. There
is no limitation on the number of such piggyback registrations pursuant to the
preceding sentence that the Company is obligated to effect.
2.1.2 Abandonment or Delay. If, at any time after giving written notice
of its intention to register any equity securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason
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not to register or to delay registration of such equity securities, the Company
may, at its election, give written notice of such determination to Prospero and
(i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities of Prospero in connection with
such abandoned registration, without prejudice, however, to the rights of
Holders under Section 2.1, and (ii) in the case of a determination to delay such
registration of its equity securities, shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities.
2.1.3 Right to Withdraw. Prospero shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section 2.1 by giving written notice to the Company
of its request to withdraw; provided, however, that (i) such request must be
made in writing prior to the earlier of the execution of the underwriting
agreement or the execution of the custody agreement with respect to such
registration and (ii) such withdrawal shall be irrevocable and, after making
such withdrawal, Prospero shall no longer have any right to include Registrable
Securities in the registration as to which such withdrawal was made.
2.1.4 Cutbacks. If the managing underwriter of any underwritten offering
shall inform the Company by letter of its belief that the number of Registrable
Securities requested to be included in a registration under this Section 2.1
would materially adversely affect such offering, then the Company will include
in such registration, first, the securities proposed by the Company to be sold
for its own account and, second, the Registrable Securities and all other
securities of the Company to be included in such registration to the extent of
the number and type, if any, that the Company is so advised can be sold in (or
during the time of) such offering, first, pro rata among Prospero and the
holders of Other Registrable Securities under any of the Other Registration
Rights Agreements participating in such offering in accordance with (i) with
respect to Prospero, the number of shares of Registrable Securities held by
Prospero, and (ii) with respect to holders of Other Registrable Securities, the
number of Other Registrable Securities held by, and if applicable, issuable upon
conversion of securities convertible into, exchangeable or exercisable for,
shares of Common Stock, to each such holder, and second, pro rata among the
holders of any other securities of the Company with respect to which the holders
thereof are entitled to and desire "piggy-back" or similar registration rights.
2.2 Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company shall, as expeditiously as possible:
2.2.1 prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC for the disposition of such Registrable
Securities in accordance with the intended method of disposition thereof, which
form (i) shall be selected by the Company and
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(ii) shall, in the case of a shelf registration, be available for the sale of
the Registrable Securities by the selling Holders thereof and such registration
statement shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC
to be filed therewith, and the Company shall use its best efforts to cause such
registration statement to become effective (provided, however, that before
filing a registration statement or prospectus or any amendments or supplements
thereto, or comparable statements under securities or blue sky laws of any
jurisdiction, the Company will furnish to counsel for the underwriters, if any,
copies of all such documents proposed to be filed (including all exhibits
thereto), which documents will be subject to the reasonable review and
reasonable comment of such counsel, and the Company shall not file any
registration statement or amendment thereto or any prospectus or supplement
thereto to which the holders of a majority of the Registrable Securities covered
by such registration statement or the underwriters, if any, shall reasonably
object in writing);
2.2.2 prepare and file with the SEC 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 such
period (which shall not be required to exceed 90 days) as any seller of
Registrable Securities pursuant to such registration statement shall request and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement;
2.2.3 furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits), and
the prospectus included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such seller and underwriter may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller (the Company hereby consenting to the use in
accordance with applicable law of each such registration statement (or amendment
or post-effective amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) by each such seller of Registrable Securities
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or prospectus);
2.2.4 use its best efforts to register and qualify the Registrable
Securities covered by such registration statement under such other securities or
"blue sky" laws of such jurisdictions as any sellers of Registrable Securities
or any managing underwriter, if any, shall reasonably request in writing, and do
any and all other acts and things that may be reasonably necessary or advisable
to enable such sellers or underwriter, if any, to consummate the
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disposition of the Registrable Securities in such jurisdictions, except that in
no event shall the Company be required to qualify to do business as a foreign
corporation in any jurisdiction where it would not, but for the requirements of
this Section, be required to be so qualified, to subject itself to taxation in
any such jurisdiction or to consent to general service of process in any such
jurisdiction;
2.2.5 promptly notify each Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any:
(i) when the registration statement, any pre-effective amendment, the prospectus
or any prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or state securities authority for amendments or
supplements to the registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the initiation of
any proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; (v) of the
existence of any fact of which the Company becomes aware that results in the
registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and (vi) if at any time
the representations and warranties contemplated by ARTICLE III below cease to be
true and correct in all material respects; and, if the notification relates to
an event described in clause (v), the Company shall promptly prepare and furnish
to each such seller and each underwriter, if any, a reasonable number of copies
of a prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a 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;
2.2.6 comply with all applicable rules and regulations of the SEC,
and make generally available to its security holders, as soon as reasonably
practicable after the effective date of the registration statement (and in any
event within 16 months thereafter), an earnings statement (which need not be
audited) covering the period of at least twelve consecutive months beginning
with the first day of the Company's first 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;
2.2.7 enter into such customary agreements (including, if applicable,
an underwriting agreement) and take such other actions as the Holders of a
majority of the
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Registrable Securities participating in such offering shall reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities;
2.2.8 use its best efforts to promptly obtain the withdrawal of any
order suspending the effectiveness of the registration statement;
2.2.9 furnish to each Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy of the
registration statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
2.2.10 cooperate with the selling Holders of Registrable Securities
and the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling holders of Registrable Securities at least three
business days prior to any sale of Registrable Securities; and
2.2.11 take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.2 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request provided that such information shall be
used only in connection with such registration.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clauses (iii), (iv) or (v) of Section 2.2.5, such Holder will discontinue such
Holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
2.2.5 and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the prospectus covering such Registrable Securities that
was in effect at the time of receipt of such notice. In the event the Company
shall give any such notice, the applicable period mentioned in Section 2.2.2
shall be extended by the number of days during such period from and including
the date of the giving of such notice to and including the date when each seller
of any Registrable Securities
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covered by such registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by Section 2.2.5.
If any such registration statement or comparable statement under "blue
sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
2.3 Registration Expenses.
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2.3.1 "Expenses" shall mean any and all fees and expenses incident to
the Company's performance of or compliance with this ARTICLE 2, including,
without limitation: (i) SEC, stock exchange or NASD registration, listing and
filing fees and all listing fees and fees with respect to the inclusion of
securities in NASDAQ, (ii) fees and expenses of compliance with state securities
or "blue sky" laws and in connection with the preparation of a "blue sky"
survey, including without limitation, reasonable fees and expenses of blue sky
counsel, (iii) printing and copying expenses, (iv) messenger and delivery
expenses, (v) expenses incurred in connection with any road show, (vi) fees and
disbursements of counsel for the Company, (vii) fees and disbursements of all
independent public accountants (including the expenses of any audit and/or "cold
comfort" letter) and fees and expenses of other persons, including special
experts, retained by the Company, (viii) fees and expenses payable to a
Qualified Independent Underwriter (as defined in NASD Conduct Rule 2720(b)(15)),
(ix) fees and expenses payable to the underwriters referred to in Section 2.2.6
and (x) any other fees and disbursements of underwriters, if any, customarily
paid by issuers or sellers of securities (collectively, "Expenses").
2.3.2 The Company shall pay all Expenses with respect to up to one
registration made pursuant to the provisions of this ARTICLE 2.
2.3.3 Notwithstanding the foregoing, (i) the provisions of this
Section 2.3 shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state in which the
offering is made and (ii) in connection with any registration hereunder, each
Holder of Registrable Securities being registered shall pay all underwriting
discounts and commissions and any transfer taxes, if any, attributable to the
sale of such Registrable Securities, pro rata with respect to payments of
discounts and commissions in
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accordance with the number of shares sold in the offering by such Holder, and
(iii) the Company shall, in the case of all registrations under this ARTICLE 2,
be responsible for all its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties).
2.4 Certain Limitations on Registration Rights.
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2.4.1 In the case of any registration under Section 2.1 if the
Company has determined to enter into an underwriting agreement in connection
therewith, all securities to be included in such registration shall be subject
to an underwriting agreement and no Person may participate in such registration
unless such Person agrees to sell such Person's securities on the basis provided
therein and completes and executes all reasonable questionnaires and other
documents (including custody agreements and powers of attorney) that must be
executed in connection therewith, and provides such other information to the
Company or the underwriter as may be necessary to register such Person's
securities.
2.4.2 No Holder shall have any right to participate in a registration
under this ARTICLE 2 if such Holder may sell twenty five percent (25%) or more
its Registrable Securities in a five (5) month period (such period commencing on
the date of the notice under Section 2.1.1) under Rule 144 under the Securities
Act.
2.5 Limitations on Sale or Distribution of Other Securities. To the extent
requested in writing by a managing underwriter, if any, of any registration
effected pursuant to ARTICLE 2, each Holder of Registrable Securities agrees not
to sell, transfer or otherwise dispose of, including any sale pursuant to Rule
144 under the Securities Act, any Registrable Securities (other than as part of
such underwritten public offering) during the time period reasonably requested
by the managing underwriter, not to exceed 180 days (and the Company hereby also
so agrees (except that the Company may effect any sale or distribution of any
such securities pursuant to a registration on Form S-4 (if reasonably acceptable
to such managing underwriter) or Form S-8, or any successor or similar form that
is then in effect) to use its reasonable best efforts to cause each holder of
any equity security or any security convertible into or exchangeable or
exercisable for any equity security of the Company purchased from the Company at
any time other than in a public offering so to agree). Each managing
underwriter shall be entitled to rely on the agreements of each Holder of
Registrable Securities set forth in this Section 2.5.1 and shall be a third
party beneficiary of the provisions of this Section 2.5.1.
2.6 No Required Sale. Nothing in this Agreement shall be deemed to create
an independent obligation on the part of any Holder to sell any Registrable
Securities pursuant to any effective registration statement.
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2.7 Indemnification.
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2.8.1 In the event of any registration of any securities of the
Company under the Securities Act pursuant to this ARTICLE 2, the Company will,
and hereby does, indemnify and hold harmless, to the fullest extent permitted by
law, each Holder of Registrable Securities, its directors, officers, Affiliates,
employees, stockholders, members and partners (and the directors, officers,
Affiliates, employees, stockholders, members and partners thereof), each other
Person who participates as an underwriter or a Qualified Independent
Underwriter, if any, in the offering or sale of such securities, each officer,
director, employee, stockholder, member or partner of such underwriter or
Qualified Independent Underwriter, and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in respect thereof
("Claims") and expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company's consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified party
may become subject under the Securities Act or otherwise, insofar as such Claims
or expenses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under which such securities were registered under the Securities Act, together
with the documents incorporated by reference therein or 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 (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus or any amendment or supplement thereto,
together with the documents incorporated by reference therein, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (iii) any
violation or alleged violation by the Company of any federal, state or common
law, rule or regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claim or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission of a material fact made in such registration
statement or amendment thereof or supplement thereto or in any such prospectus
or any preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for use therein. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.
2.7.2 Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1 is being effected
(and, if the Company requires as a condition to including any Registrable
Securities in any registration statement filed in accordance
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with Section 2.1, any underwriter and Qualified Independent Underwriter, if any)
shall, severally and not jointly, indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 2.7.1) to the fullest
extent permitted by law, on an after-tax basis, the Company, its officers,
directors, Affiliates, employees and stockholders, members and partners (and the
directors, officers, Affiliates, employees, stockholders, members and partners
thereof), each Person controlling the Company within the meaning of the
Securities Act and all other prospective sellers and their directors, officers,
general and limited partners and respective controlling Persons with respect to
any untrue statement or alleged untrue statement of any material fact in, or
omission or alleged omission of any material fact from, such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement thereto, in each case, to the extent (and only to
the extent) that such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company or its representatives by or on behalf of such Holder
(or underwriter or Qualified Independent Underwriter, if any), specifically for
use therein and Holder shall reimburse such indemnified party for any legal or
other expenses reasonably incurred in connection with investigating or defending
any such Claim as such expenses are incurred; provided, however, that the
aggregate amount that any such Holder shall be required to pay pursuant to this
Section 2.7.2 and Sections 2.7.3 and 2.7.5 shall in no case be greater than the
amount of the net proceeds received by such person upon the sale of the
Registrable Securities pursuant to the registration statement giving rise to
such claim. Such indemnity and reimbursement of expenses shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder.
2.7.3 Indemnification similar to that specified in Sections 2.7.1 and
2.7.2 (with appropriate modifications) shall be given by the Company and each
seller of Registrable Securities with respect to any required registration or
other qualification of securities under any state securities and "blue sky"
laws.
2.7.4 Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement of
any action or proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 2.7, but the failure of any indemnified party
to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.7, except to the
extent the indemnifying party is materially prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this ARTICLE 2. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to assume the
defense thereof jointly with any other indemnifying
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party similarly notified, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party that it so chooses, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
(i) if the indemnifying party fails to take reasonable steps necessary to defend
diligently the action or proceeding within 20 days after receiving notice from
such indemnified party that the indemnified party believes it has failed to do
so; or (ii) if such indemnified party who is a defendant in any action or
proceeding that is also brought against the indemnifying party reasonably shall
have concluded that there may be one or more legal defenses available to such
indemnified party that are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defense as
set forth above (but with no more than one firm of counsel for all indemnified
parties in each jurisdiction), and the indemnifying party shall be liable for
any expenses therefor. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (A)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (B) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
2.7.5 If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.7.1, 2.7.2
or 2.7.3, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any Claim in such proportion as
is appropriate to reflect the relative fault of the indemnifying party, on the
one hand, and the indemnified party, on the other hand, with respect to such
offering of securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 2.7.5 were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations
12
referred to in the preceding sentences of this Section 2.7.5. The amount paid or
payable in respect of any Claim shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. 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. The relative fault of the indemnifying party and
of the indemnified party shall be determined by reference to, among other
things, whether the violation 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. Notwithstanding anything in this Section 2.7.5 to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.7.5 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages or liabilities
of the indemnified parties relate, less the amount of any indemnification
payment made by such indemnifying party pursuant to Sections 2.7.2 and 2.7.3.
2.7.6 The indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution that any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the transfer of the
Registrable Securities by any such party.
2.7.7 The indemnification and contribution required by this Section
2.7 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
ARTICLE III
UNDERWRITTEN OFFERINGS
Piggyback Underwritten Offerings. In the case of a registration in which
the Holders of Registrable Securities participate pursuant to ARTICLE 2, if the
Company shall have determined to enter into an underwriting agreement in
connection therewith, all of the Holders of Registrable Securities to be
included in such registration shall be subject to such underwriting agreement.
Any Holder participating in such registration may, at its option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holder. Such underwriting agreement shall also contain such representations and
warranties by the participating Holders as are customary in agreements of that
type.
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ARTICLE IV
GENERAL
4.1 Rule 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act in respect of the
Common Stock or securities of the Company convertible into or exchangeable or
exercisable for Common Stock, the Company covenants that (i) so long as it
remains subject to the reporting provisions of the Exchange Act, it will timely
file the reports required to be filed by it under the Securities Act or the
Exchange Act (including, but not limited to, the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act), and (ii) will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder of Registrable Securities, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
4.2 Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the Company and the
holders of not less than a majority of the shares of Registrable Securities;
provided, however, that the addition of new parties to this Agreement in
accordance with the provisions of the Purchase Agreement shall not be deemed an
amendment hereof and shall not require the consent of any party hereto.
4.3 Notices. Except as otherwise provided in this Agreement, all notices,
requests, consents and other communications hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in person
or by telecopy, nationally recognized overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or in a counterpart
hereto (as the case may be ) or such other address as may hereafter be
designated in writing by such party to the other parties:
(i) if to the Company, to:
Etinuum, Inc.
0000 XXX Xxxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
14
Attention: Chief Executive Officer
with a copy to:
Xxxxxxxx, Xxxxx & Xxxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: G. Xxxxx Xxxxxxxx, Jr.
(ii) if to an Acorn Shareholder, at the address set forth in the signature
pages hereto:
with a copy to:
Xxxxxx & Xxxx
0 Xxxxxxxx Xxxxx
X.X. Xxx 000000
Xxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
(iii) if to Prospero:
Prospero LLC
000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxx Xxxxxxx
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
4.4 No Inconsistent Agreements. Without the prior written consent of
holders of a majority of the Common Stock, the Company will not, on or after the
date of this Agreement,
15
enter into any agreement with respect to its securities that is inconsistent
with the rights granted in this Agreement or otherwise conflicts with the
provisions hereof, other than any lock-up agreement with the underwriters in
connection with any registered offering effected hereunder, pursuant to which
the Company shall agree not to register for sale, and the Company shall agree
not to sell or otherwise dispose of, Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, for a specified period
following the registered offering. The Acorn Shareholders will not unreasonably
withhold their consent to any waiver of a term hereof or an amendment hereto. No
consent of the Acorn Shareholders or Prospero LLC to an amendment hereto will be
required if the same amendment is made in respect of securities subject to Other
Registration Rights Agreements.
4.5 Miscellaneous.
-------------
4.5.1 This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and the respective successors,
personal representatives and assigns of the parties hereto, whether so expressed
or not. If any Person shall acquire Registrable Securities from any Holder, in
any manner, whether by operation of law or otherwise, such transferee shall
promptly notify the Company and such Registrable Securities acquired from such
Holder shall be held subject to all of the terms of this Agreement, and by
taking and holding such Registrable Securities such Person shall be entitled to
receive the benefits of and be conclusively deemed to have agreed to be bound by
and to perform all of the terms and provisions of this Agreement. If the
Company shall so request, any such successor or assign shall agree in writing to
acquire and hold the Registrable Securities acquired from such Holder subject to
all of the terms hereof. If any Holder shall acquire additional Registrable
Securities, such Registrable Securities shall be subject to all of the terms,
and entitled to all the benefits, of this Agreement. No Person other than a
Holder shall be entitled to any benefits under this Agreement, except as
otherwise expressly provided herein.
4.5.2 This Agreement (with the documents referred to herein or
delivered pursuant hereto) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.
4.5.3 This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Colorado without giving effect to
the conflicts of law principles thereof.
4.5.4 The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. All section
references are to this Agreement unless otherwise expressly provided.
16
4.5.5 This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
4.5.6 Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
4.5.7 The parties hereto acknowledge that there would be no adequate
remedy at law if any party fails to perform any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to seek injunctive
relief, including specific performance, to enforce such obligations without the
posting of any bond.
4.5.8 Each party hereto shall take all such action necessary to cause
each certificate of the Company's securities to bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, BY AND AMONG
ETINUUM, INC. AND CERTAIN OTHER PARTIES DATED MARCH __, 2000, COPIES
OF WHICH ARE AVAILABLE AT THE OFFICES OF ETINUUM, INC.
4.5.9 Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date set forth above.
ETINUUM, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
----------------------------
Xxxxxxx X. X'Xxxxxxx,
Chief Executive Officer and President
THE ACORN SHAREHOLDERS
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx
----------------------------- -------------------------------
Xxxxxx Xxxxxx Xxxxx Xxxxxx
Address: Address:
----------------------------- -------------------------------
----------------------------- -------------------------------
----------------------------- -------------------------------
Telephone: __________________ Telephone: ____________________
Facsimile: __________________ Facsimile: ___________________
/s/ Xxxx Xxxxxxxxxx /s/ Xxxxx Xxxxx
----------------------------- -------------------------------
Xxxx Xxxxxxxxxx Xxxxx Xxxxx
Address: Address:
----------------------------- -------------------------------
----------------------------- -------------------------------
----------------------------- -------------------------------
Telephone: __________________ Telephone: ____________________
Facsimile: __________________ Facsimile: ___________________
/s/ Xxxxxxx Xxxxx XXXXXXXX LLC.
-----------------------------
Xxxxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Address: Xxxxxx Xxxxxxx, Managing Member
-----------------------------
-----------------------------
-----------------------------
Telephone: __________________
Facsimile: __________________
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