AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT AMONG NSI SOFTWARE, INC. AND THE HOLDERS NAMED HEREIN OCTOBER 6, 2004
Exhibit 10.11
AMENDED AND RESTATED
AMONG
NSI SOFTWARE, INC.
AND
THE HOLDERS NAMED HEREIN
OCTOBER 6, 2004
AMENDED AND RESTATED
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as
of October 6, 2004 by and among (i) NSI Software, Inc., a Delaware corporation (the “Company”),
(ii) the Series B Investors listed on Exhibit A hereto (each individually a “Series B
Investor” and collectively, the “Series B Investors”) and (iii) the Series C Investors listed on
Exhibit B hereto (each individually a “Series C Investor” and collectively, the “Series C
Investors”). The Series B Investors and the Series C Investors, together with any other persons
who shall hereafter acquire Registrable Securities (as hereinafter defined) and execute a
counterpart hereto pursuant to the provisions of, and subject to the restrictions and rights set
forth in, this Agreement, are referred to herein collectively as the “Holders” and individually as
a “Holder.”
WHEREAS, the Company’s predecessor, Network Specialists, Incorporated, and the
Series B Investors are parties to a Registration Rights Agreement dated as of November 13, 2002, as
amended on September 26, 2003 (the “Prior Agreement”); and
WHEREAS, pursuant to a Series C Preferred Stock Purchase Agreement of even date
herewith (the “Purchase Agreement”), the Company proposes to issue up to 7,717,398 shares of its
Series C Stock to the Series C Investors; and
WHEREAS, as a condition to entering into the Purchase Agreement, the Series C Investors have
requested that the Company grant to them registration rights and certain other rights and covenants
as set forth herein; and
WHEREAS, the parties to the Prior Agreement wish to amend and restate the Prior Agreement to
reflect the issuance of Series C Stock and to make certain other changes to the Prior Agreement
pursuant to Section 3.1 thereof;
WHEREAS, the Series B Investors who are parties to this Agreement are the holders of at least
a majority of the outstanding Registrable Securities (as that term is defined in the Prior
Agreement), as required for amendment of the Prior Agreement pursuant to Section 3.1 thereof; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings ascribed to them in
Article 2 hereof.
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement and in the Purchase Agreement and for other
good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that, by the
execution and delivery of this Agreement, the Prior Agreement be hereby amended and restated in its
entirety as follows:
1. REGISTRATION RIGHTS
1.1.1 Demand Registration Rights
At any time after six (6) months following an IPO, one or more Series B Investors or Series C
Investors holding, in the aggregate, at least twenty percent (20%) of the Registrable Securities
then held by all Series B Investors and Series C Investors, may request registration for sale under
the Act of all or part of the Registrable Securities then held by them, and upon such request the
Company will promptly take the actions specified in Section 1.1.2.
1.1.2. Demand Procedures
Within ten (10) Business Days after receipt by the Company of a written registration request
under Section 1.1.1 (which request shall specify the number of shares proposed to be registered and
sold and the manner in which such sale is proposed to be effected), the Company shall promptly give
written notice to all other Holders of the proposed demand registration, and such other Holders
shall have the right to join in the proposed registration and sale, upon written request to the
Company (which request shall specify the number of shares proposed to be registered and sold)
within ten (10) Business Days after receipt of such notice from the Company. The Company shall
thereafter, as expeditiously as practicable, use commercially reasonable efforts to (i) file with
the SEC under the Act a registration statement on the appropriate form concerning all Registrable
Securities specified in the demand request and all Registrable Securities with respect to which the
Company has received the written request from the other Holders and (ii) cause the registration
statement to be declared effective. At the request of the Holders requesting registration, the
Company shall cause each offering pursuant to Section 1.1.1 to be managed, on a firm commitment
basis, by a recognized regional or national underwriter selected by the participating Holders and
approved by the Company, such approval not to be unreasonably withheld. All Holders proposing to
distribute their securities through such underwriting shall enter into an underwriting agreement in
customary form. The Company shall not be obligated to effect more than three (3) registrations
requested by the Holders under Section 1.1.1, provided, however, that any such request shall be
deemed satisfied only when a registration statement covering all of the Registrable Securities
specified in notices received as aforesaid, for sale in accordance with the method of disposition
specified by the Holders, has become effective.
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1.1.3. Delay by Company
The Company shall not be required to effect a demand registration under the Act pursuant to
Section 1.1.1 above if (i) the Company receives a request for registration under Section 1.1.1 less
than 90 days preceding the anticipated effective date of a proposed underwritten public offering of
securities of the Company approved by the Company’s Board of Directors prior to the Company’s
receipt of the request and in such event the Company shall not be required to effect any such
requested registration until 120 days after the effective date of such proposed underwritten public
offering; (ii) within 120 days prior to any such request for registration, a registration of
securities of the Company has been effected in which the Holders had the right to participate
pursuant to this Section 1.1 or Section 1.3 hereof; or (iii) the Board of Directors of the Company
reasonably determines in good faith that effecting such a demand registration at such time would
have a material adverse effect upon a proposed sale of all (or substantially all) of the assets of
the Company, or a merger, reorganization, recapitalization, or business combination materially
affecting the capital structure or equity ownership of the Company, or would otherwise be seriously
detrimental to the Company because the Company was then in the process of raising capital in the
public or private markets; provided, however, that the Company may only delay a demand registration
pursuant to this Section 1.1.3 for a period not exceeding 120 days (or until such earlier time as
such transaction is consummated or no longer proposed) and may only defer any such filing pursuant
to this Section 1.1.3 once per calendar year. The Company shall promptly notify in writing the
Holders requesting registration of any decision not to effect any such request for registration
pursuant to this Section 1.1.3, which notice shall set forth in reasonable detail the reason for
such decision and shall include an undertaking by the Company promptly to notify such Holders as
soon as a demand registration may be effected, and such Holders will hold the information in
confidence.
1.1.4. Reduction
If a demand registration initiated by any Series B Investor or Series C Investors pursuant to
Section 1.1.1 is an underwritten registration and the managing underwriters advise the Company and
the Holders participating in the demand registration in writing that in their opinion the number of
shares of Common Stock requested to be included in such registration exceeds the number which can
be sold in such offering, then the amount of such shares that may be included in such registration
shall be allocated pro rata among the Holders participating in the demand registration based on the
number of shares of Registrable Securities held on a fully diluted basis with all other Holders of
Registrable Securities.
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1.1.5. Withdrawal
Holders participating in any demand registration pursuant to this Section 1.1 may withdraw at
any time before a registration statement is declared effective, and the Company may withdraw such
registration statement if no Registrable Securities are then proposed to be included (and if
withdrawn by the Company the Holders shall not be deemed to have requested a demand registration
for purposes of Section 1.1.1 hereof). If the Company withdraws a registration statement under
this Section 1.1.5 in respect of a registration for which the Company would otherwise be required
to pay expenses under Section 1.6.2 hereof, the Holders that shall have withdrawn shall reimburse
the Company for all expenses of such registration in proportion to the number of shares each such
withdrawing Holder shall have requested to be registered.
1.2. Piggyback Registration Rights
1.2.1. Request
If at any time or times after the date of this Agreement the Company proposes to file a
registration statement covering any of its securities under the Act (whether to be sold by it or by
one or more selling stockholders), other than an offering pursuant to a demand registration under
Section 1.1.1 or Section 1.3 hereof or an offering registered on Form S-8 or Form S-4, or successor
forms relating to employee stock plans and business combinations, the Company shall, not less than
20 days prior to the proposed filing date of the registration form, give written notice of the
proposed registration to all Holders specifying in reasonable detail the proposed transaction to be
covered by the registration statement, and at the written request of any Holder delivered to the
Company within 20 days after giving such notice, shall include in such registration and offering,
and in any underwriting of such offering, all Registrable Securities as may have been designated in
the Holder’s request. The Company shall have no obligation to include shares of Common Stock owned
by any Holder in a registration statement pursuant to this Section 1.2, unless and until such
Holder (a) in connection with any underwritten offering, agrees to enter into an underwriting
agreement, a custody agreement and power of attorney and any other customary documents required in
an underwritten offering all in customary form and containing customary provisions and (b) shall
have furnished the Company with all information and statements about or pertaining to such Holder
in such reasonable detail and on such timely basis as is reasonably deemed by the Company to be
legally required with respect to the preparation of the registration statement.
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1.2.2. Reduction
If a registration in which any Holder has the right or is otherwise permitted to participate
pursuant to this Section 1.2 is (i) the IPO, the Company may limit, to the extent so advised in
writing by the underwriters, the amount of securities (including Registrable Securities) to be
included in the registration by the Company’s stockholders (including the Holders), or may exclude,
to the extent so advised in writing by the underwriters, such securities (including Registrable
Securities) entirely from the IPO, or (ii) an underwritten registration subsequent to the IPO and
the managing underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number which can be sold in
such offering, the Company shall include in such registration (i) first, the shares proposed to be
sold by Holders exercising rights under Section 1.2.1, allocated pro rata among such Holders in
proportion to the number of Registrable Securities owned by them, (ii) second, by any other
stockholders proposing to sell shares of Common Stock pursuant to such registration; and (iii)
third, the shares proposed to be sold by the Company.
1.3. Registration on Form S-3
Subject to the limitations set forth in Section 1.1.3, if at any time the Company is eligible
to use Form S-3 (or any successor form) for secondary sales any Series B Investor or Series C
Investor may request (by written notice to the Company stating the number of Registrable Securities
proposed to be sold and the intended method of disposition) that the Company file a registration
statement on Form S-3 (or any successor form) for a public sale of all or any portion of the
Registrable Securities beneficially owned by it, provided that the reasonably anticipated aggregate
price to the public of such Registrable Securities shall be at least $1,000,000. At the written
request of the Holder requesting such registration, such registration shall be for a delayed or
continuous offering under Rule 415 under the Act. Upon receiving such request, the Company shall
use commercially reasonable efforts to promptly file a registration statement on Form S-3 (or any
successor form) to register under the Act for public sale in accordance with the method of
disposition specified in such request, the number of shares of Registrable Securities specified in
such request and shall otherwise carry out the actions specified in Section 1.1.2 and 1.4. There
shall be no limitation on the number of registrations on Form S-3 which may be requested and
obtained under this Section 1.3.
1.4. Registration Procedures
Whenever any Holder has requested that any shares of Common Stock be registered pursuant to
Sections 1.1, 1.2 or 1.3 hereof, the Company shall, as expeditiously as reasonably possible:
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(1) prepare and file with the SEC a registration statement with respect to such shares and use
commercially reasonable efforts to cause such registration statement to become effective as soon as
reasonably practicable thereafter (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall furnish counsel for such
Holder with copies of all such documents proposed to be filed);
(2) prepare and file with the SEC such amendments and supplements to such registration
statement and prospectus used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 90 days (two (2) years in the case of a
registration pursuant to Section 1.3 hereof), or until such earlier time as Holder has completed
the distribution described in such registration statement, whichever occurs first;
(3) furnish to such Holder 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 Holder may reasonably request;
(4) use commercially reasonable efforts to register or qualify such shares under such other
securities or blue sky laws of such jurisdictions as such Holder requests (and to maintain such
registrations and qualifications effective for the applicable period of time set forth in Section
1.4(2) hereof), and to do any and all other acts and things which may be necessary or advisable to
enable such Holder to consummate the disposition in such jurisdictions of such shares (provided
that the Company will not be required to (i) qualify generally to do business in any jurisdiction
where it would not be required but for this subsection (4), (ii) subject itself to taxation in any
such jurisdiction, or (iii) file any general consent to service of process in any such
jurisdiction); provided that, notwithstanding anything to the contrary in this Agreement with
respect to the bearing of expenses, if any such jurisdiction shall require that expenses incurred
in connection with the qualification of such shares in that jurisdiction be borne in part or full
by such Holder, then such Holder shall pay such expenses to the extent required by such
jurisdiction;
(5) notify such Holder, at any time when a prospectus relating thereto is required to be
delivered under the Act within the period that the Company is required to keep the registration
statement effective, of the happening of any event as a result of which the prospectus included in
any such registration statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and promptly prepare, file and furnish to
the Holder a supplement or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such shares, such prospectus will not contain an untrue statement of a material fact
or omit to state a material fact
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required to be stated therein or, in light of the circumstances then existing, necessary to make
the statements therein not misleading;
(6) cause all such shares to be listed on securities exchanges, if any, on which similar
securities issued by the Company are then listed (or if not then listed, on such exchanges as are
requested by a majority of the participating Holders);
(7) provide a transfer agent and registrar for all such shares not later than the effective
date of such registration statement;
(8) enter into such customary agreements and take all such other customary actions as such
Holder reasonably requests (and subject to its reasonable approval) in order to expedite or
facilitate the disposition of such shares;
(9) make available for inspection by such Holder, by any underwriter participating in any
distribution pursuant to such registration statement, and by any attorney, accountant or other
agent retained by such Holder or by any such underwriter, all financial and other records,
pertinent corporate documents, and properties (other than confidential intellectual property) of
the Company; and
(10) in connection with an underwritten offering pursuant to a registration statement filed
pursuant to Section 1.1 hereof, enter into an underwriting agreement in customary form and
containing reasonable customary provisions, including provisions for indemnification of
underwriters and contribution, if so requested by any underwriter.
1.5. Holdback Agreement
(a) Notwithstanding anything in this Agreement to the contrary, if after any registration
statement to which the rights hereunder apply becomes effective (and prior to completion of any
sales thereunder), the Company’s Board of Directors determines in good faith that the failure of
the Company to (i) suspend sales of stock under the registration statement or (ii) amend or
supplement the registration statement, would have a material adverse effect on the Company, the
Company shall so notify each Holder participating in such registration and each Holder shall
suspend any further sales under such registration statement until the Company advises the Holder
that the registration statement has been amended or that conditions no longer exist which would
require such suspension, provided that the Company may impose any such suspension for no more than
60 days and no more than two (2) times during any twelve month period.
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(b) If requested by the Company or its underwriters, none of the Holders will sell their
Registrable Securities for a specified period (not to exceed one hundred and eighty (180) days)
following the effective date of the IPO; provided that (i) all executive officers, directors,
holders of one percent (1%) or more of the Company’s outstanding Equity Securities, and all other
persons with registration rights enter into similar agreements and (ii) that in the event any
person subject to any lock-up agreement related to the offering (a “Released Person”) is released
from the restrictions therein (the “Lock-up Restrictions”), a percentage of shares of the Common
Stock held by each Holder equal to the amount of shares released in favor of such Released Person
divided by the total number of shares of Common Stock held by such person that is subject to the
Lock-up Restrictions shall be immediately and fully released from any remaining Lock-up
Restrictions. Furthermore, with respect to any shares of the Company offered or traded in the
public market (including pursuant to the IPO or any market that may develop pursuant to Rule 144A
promulgated under the Securities Act), investors shall be permitted to acquire or dispose of any
such shares without regard to such market standoff provision. The terms of the market standoff may
not be amended as to any investment company without the consent of such investment company.
1.6. Registration Expenses
1.6.1. Holder Expenses
If, pursuant to Sections 1.1, 1.2 or 1.3 hereof, Registrable Securities are included in a
registration statement, then the Holder thereof shall pay all transfer taxes, if any, relating to
the sale of its shares, and any underwriting discounts or commissions or the equivalent thereof
applicable to the sale of its shares.
1.6.2. Company Expenses
Except for the fees and expenses specified in Section 1.6.1 hereof and except as provided
below in this Section 1.6.2, the Company shall pay all expenses incident to the registration of
shares by the Company and any Holders pursuant to Sections 1.1, 1.2 or 1.3 hereof, and 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,
underwriting discounts, fees and expenses (other than any Holder’s portion of any underwriting
discounts or commissions or the equivalent thereof), printing expenses, messenger and delivery
expenses, and reasonable fees and expenses of counsel for the Company and a single counsel for all
Holders selling shares and all independent certified public accountants and other persons retained
by the Company.
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1.6.3. Indemnity and Contribution
(a) In the event that any shares owned by a Holder are proposed to be offered by means of a
registration statement pursuant to Section 1.1, 1.2 or 1.3 hereof, to the extent permitted by law,
the Company agrees to indemnify and hold harmless such Holder, any underwriter participating in
such offering, each officer, partner, manager and director of such person, each person, if any, who
controls or may control such Holder or underwriter within the meaning of the Act and each
representative of any Holder serving on the Board of Directors of the Company (such Holder or
underwriter, its officers, partners, managers directors and representatives, and any such other
persons being hereinafter referred to individually as an “Investor Indemnified Person” and
collectively as “Investor Indemnified Persons”) from and against all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs, and expenses, including,
without limitation, interest, penalties, and attorneys’ fees and disbursements, asserted against,
resulting to, imposed upon or incurred by such Investor Indemnified Person, directly or indirectly
(hereinafter referred to in this Section 1.6.3 in the singular as a “claim” and in the plural as
“claims”), based upon, arising out of or resulting from any breach of representation or warranty
made by the Company in any underwriting agreement or any untrue statement of a material fact
contained in the registration statement or any omission to state therein a material fact necessary
to make the statements made therein, in the light of the circumstances under which they were made,
not misleading, except insofar as such claim is based upon, arises out of or results from
information furnished to the Company in writing by such Investor Indemnified Person for use in
connection with the registration statement.
(b) Each Holder shall, if securities held by him or it are included among the securities as to
which such registration, qualification or compliance is being effected, indemnify the Company, each
of its directors and officers, and each person who controls (as defined in the Securities Act) the
Company (the Company, its directors, officers and each person who controls the Company being
hereinafter referred to individually as a “Company Indemnified Person” and collectively as “Company
Indemnified Persons”), against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and shall reimburse the
Company Indemnified Persons, for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement, prospectus, offering
circular or
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other document in reliance upon and in conformity with written information furnished to the Company
by such Holder specifically for use therein; provided, however, that the obligations of such Holder
hereunder shall be limited to an amount equal to the net proceeds to such Holder of securities sold
in such offering as contemplated herein.
(c) The indemnification provisions set forth herein shall be in addition to any liability the
Company or any Holder may otherwise have to the Investor Indemnified Persons or Company Indemnified
Persons. The Company Indemnified Persons and Investor Indemnified Persons are hereinafter referred
to as “Indemnified Persons.” Promptly after receiving notice of any claim in respect of which an
Indemnified Person may seek indemnification under this Section 1.6.3, such Indemnified Person shall
submit written notice thereof to either the Company or the Holders, as the case may be (sometimes
being hereinafter referred to as an “Indemnifying Person”). The omission of the Indemnified Person
so to notify the Indemnifying Person of any such claim shall not relieve the Indemnifying Person
from any liability it may have hereunder except to the extent that (a) such liability was caused or
increased by such omission, or (b) the ability of the Indemnifying Person to reduce such liability
was materially adversely affected by such omission. In addition, the omission of the Indemnified
Person so to notify the Indemnifying Person of any such claim shall not relieve the Indemnifying
Person from any liability it may have otherwise than hereunder. The Indemnifying Person shall have
the right to undertake, by counsel or representatives of its own choosing, the defense, compromise
or settlement (without admitting liability of the Indemnified Person) of any such claim asserted,
such defense, compromise or settlement to be undertaken at the expense of the Indemnifying Person,
and the Indemnified Person shall have the right to engage separate counsel, at its own expense,
whom counsel for the Indemnifying Person shall keep informed and consult with in a reasonable
manner; provided, however, that the Indemnified Person shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the Indemnifying Person, if representation of
such Indemnified Person by the counsel retained by the Indemnifying Person would be inappropriate
due to actual or potential differing interests between such Indemnified Person and any other party
represented by such counsel in such proceeding. In the event the Indemnifying Person shall elect
not to undertake such defense by its own representatives, the Indemnifying Person shall give prompt
written notice of such election to the Indemnified Person, and the Indemnified Person shall
undertake the defense, compromise or settlement (without admitting liability of the Indemnified
Person) thereof on behalf of and for the account of the Indemnifying Person by counsel or other
representatives designated by the Indemnified Person. Notwithstanding the foregoing, no
Indemnifying Person shall be obligated hereunder with respect to amounts paid in settlement of any
claim if such settlement is effected without the consent of such Indemnifying Person (such consent
not to be unreasonably withheld).
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(d) If the indemnification provided for in this Section 1.6 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Person, then the Indemnifying Person, in lieu of
indemnifying such Indemnified Person hereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of any losses or claims in such proportion as is appropriate to
reflect the relative fault of the Indemnified Person on the one hand and the Indemnifying Person on
the other in connection with the statements or omissions that resulted in such losses or claims as
well as any other relevant equitable considerations. The relative fault of the Indemnified Person
and the Indemnifying Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Person or by the Indemnified Person and the
parties’ relative intent, knowledge and access to information and opportunity to correct or prevent
such statement or omission. In no event will the liability of any Holder for contribution exceed
the net proceeds received by such Holder in any sale of securities to which such liability relates.
1.7. Grant and Transfer of Registration Rights
Except for registration rights granted by the Company after the date hereof which are
subordinate to the rights of the Holders hereunder, the Company shall not grant any registration
rights to any other person or entity without the prior written consent of holders of two-thirds of
all Registrable Securities held by the Holders, on a fully-diluted as converted to Common Stock
basis, which consent shall not be unreasonably withheld or delayed. Holders shall have the right
to transfer or assign the rights contained in this Agreement (i) to any limited partner or
affiliate of a Holder in connection with the transfer of any Registrable Securities; (ii) to any
third party transferee acquiring at least five percent (5%) of all Equity Securities then
outstanding, on a fully-diluted as converted to Common Stock basis; or (iii) in the event that the
transferring or assigning Holder owns less than five percent (5%) of all Equity Securities on a
fully-diluted as converted to Common Stock basis, to any third party transferee acquiring all (but
not less than all) of the Registrable Securities held by such Holder; provided: (a) the Company
is, within a reasonable time after such transfer, furnished with written notice of the name and
address of such transferee or assignee and the securities with respect to which such registration
rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement; and (c) such assignment shall be effective
only if immediately following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.
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1.8. Information from Holder
It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder’s Registrable Securities.
1.9 Rule 144 Requirements
Immediately after the date on which a registration statement filed by the Company under the
Act becomes effective, the Company shall undertake to make publicly available, and available to the
Holders, such information as is necessary to enable the Holders to make sales of Registrable
Securities pursuant to Rule 144 of the Act. The Company shall furnish to any Holder, upon request,
a written statement executed by the Company as to the steps it has taken to comply with the current
public information requirements of Rule 144.
1.10 Sale of Series B Stock or Series C Stock to Underwriter
Notwithstanding any provision of this Agreement to the contrary, in lieu of converting any
shares of Series B Stock or Series C Stock prior to the filing of any registration statement filed
pursuant to this Agreement, the holder of such shares may sell such shares of Series B Stock or
Series C Stock to the underwriters of the offering being registered upon the undertaking of such
underwriters to convert the Series B Stock or Series C Stock to Common Stock, each such step to be
effective at the closing of the offering. In such event, the Company agrees to cause the Common
Stock issuable on the conversion of the Series B Stock or Series C Stock to be issued within such
time period as will permit the underwriters to make and complete the distribution contemplated by
the underwriting.
1.11 Changes in Series B Stock, Series C Stock or Common Stock
If, and as often as, there is any change in the Series B Stock, Series C Stock or Common Stock
by way of a stock split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment
shall be made in the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Series B Stock, Series C Stock or Common Stock as so changed.
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2. DEFINITIONS
The capitalized terms contained in this Agreement shall have the following meanings unless
otherwise specifically defined:
“Act” shall mean the Securities Act of 1933, as amended.
“Agreement” shall mean this Amended and Restated Registration Rights Agreement.
“Business Day” shall mean Monday through Friday and shall exclude any federal or bank holidays
observed in New York City.
“Company” shall mean NSI Software, Inc., a Delaware corporation, or any successor thereto.
“Common Stock” shall mean the common stock of the Company, $.001 par value per share.
“Equity Securities” shall mean the Common Stock, the Series B Stock, the Series C Stock and
any warrants or other rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock, any stock or security convertible into or exchangeable for Common Stock or any other
stock, security or interest in the Company whether or not convertible into or exchangeable for
Common Stock.
“Holders” shall mean the Series B Investors and Series C Investors who hold Registrable
Securities, and any other person or entity that is a valid transferee of the rights granted
hereunder pursuant to Section 1.7 hereof.
“Indemnified Person” shall have the meaning ascribed to that term in Section 1.6.3.
“Indemnifying Person” shall have the meaning ascribed to that term in Section 1.6.3.
“IPO” shall mean the initial public offering of the Company’s Equity Securities registered
under the Act.
“Series B Stock” shall mean the Series B Preferred Stock, par value $.01 per share, of the
Company.
“Series C Stock” shall mean the Series C Preferred Stock, par value $.01 per share, of the
Company.
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“Registrable Securities” shall mean (i) shares of Common Stock, issued or issuable upon
conversion of the Series B Stock, now held or subsequently acquired by the Holder, (ii) shares of
Common Stock, issued or issuable upon conversion of the Series C Stock, now held or subsequently
acquired by the Holder and (iii) any equity securities issued as a distribution with respect to or
in exchange for or in replacement for any of the shares referred to in clauses (i) and (ii);
provided, however, that Registrable Securities shall not include any securities that have been
previously sold pursuant to a registration statement filed under the Act or under Rule 144
promulgated under the Act, or which have otherwise been transferred in a transaction in which the
transferor’s rights under this Agreement are not assigned, or, as to any Holder, all of such
Holder’s shares if all of such shares are then eligible for sale in a single transaction under Rule
144(k), promulgated under the Act.
“SEC” shall mean the United States Securities and Exchange Commission.
3. MISCELLANEOUS
3.1. Entire Agreement; Amendment
This Agreement constitutes the entire agreement among the parties hereto with respect to the
matters provided for herein, and it supersedes all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein. Subject to the provisions of
Section 1.7 hereof, this Agreement may not be amended without the written consent of the Company
and Holders who beneficially own at least a majority of the outstanding Registrable Securities then
held by all Holders.
3.2. Waiver
No delay or failure on the part of any party hereto in exercising any right, power or
privilege under this Agreement or under any other instruments given in connection with or pursuant
to this Agreement shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege, or the exercise of
any other right, power or privilege. No waiver shall be valid against any party hereto unless made
in writing and signed by the party against whom enforcement of such waiver is sought and then only
to the extent expressly specified therein.
14
3.3. Termination
This Agreement shall forthwith become wholly void and of no effect upon the earlier to occur
of the following: (i) as to any Holder (including any assignee of Holder), at such time as all of
such Holder’s Registrable Securities are then eligible for sale in a single transaction under Rule
144(k), promulgated under the Act, or (ii) seven years from the closing date of the Company’s IPO.
3.4. No Third Party Beneficiaries
Except to the extent that the rights hereunder are assigned in accordance with Section 1.7, it
is the explicit intention and agreement of the parties hereto that no person or entity other than
the parties hereto is or shall be entitled to bring any action to enforce any provision of this
Agreement against any of the parties hereto, and the covenants, undertakings and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto or their respective successors, heirs, executors, administrators, legal
representatives and permitted assigns.
3.5. Binding Effect
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, heirs, executors, administrators, legal representatives and permitted
assigns, including any successor corporation upon a reincorporation of the Company into another
jurisdiction.
3.6. Governing Law
This Agreement, the rights and obligations of the parties hereto, and any claims or disputes
relating thereto, shall be governed by and construed in accordance with the laws of the State of
New York (excluding the choice of law rules thereof).
3.7. Notices
All notices, demands, requests, or other communications which may be or are required to be
given, served, or sent by any party to any other party pursuant to this Agreement shall be in
writing and shall be hand-delivered, sent by overnight courier service or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
15
| (i) | If to the Company: | ||
| NSI Software, Inc. Xxxxx Xxxxxxxxxx Xxxxx Xxx Xxxxxx Xxxxx, Xxxxx 000 Xxxxxxx, Xxx Xxxxxx 00000 Attention: Xxxxxx X. Xxxxxx, Xx. Facsimile: (000) 000-0000 |
with a copy (which shall not constitute notice) to:
| Xxxxxxxxx & DiGioia, LLP 00 Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxx X. XxXxxxx Facsimile: (000) 000-0000 |
|||
| (ii) | If to ABS: | ||
| ABS Capital Partners IV, L.P. 000 Xxxx Xxxxx Xxxxxx Xxxxx 000 Xxxxxxxxx, XX 00000 Attention: Xxxxx Xxxx |
|||
| with a copy (which shall not constitute notice) to: | |||
| Xxxxx & Xxxxxxx L.L.P. 000 Xxxxx Xxxxxxx Xxxxxx Xxxxx 0000 Xxxxxxxxx, Xxxxxxxx 00000 Attention: Xxxxxxx X. Silver |
|||
| (iii) | If to any other Holder, such Holder’s address as appearing on the records of the Company. |
Each party may designate by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand, request, or
communication which shall be hand-delivered or mailed in the manner described above, shall be
deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it
is delivered to the addressee (with the return receipt or the delivery receipt being deemed
conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.
16
3.8. Execution in Counterparts
To facilitate execution, this Agreement may be executed in as many counterparts as may be
required; and it shall not be necessary that the signatures of, or on behalf of, each party, or
that the signatures of all persons required to bind any party, appear on each counterpart; but it
shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of
the persons required to bind any party, appear on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not be necessary in making
proof of this Agreement to produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
17
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have caused this
Agreement to be duly executed on their behalf, as of the day and year first hereinabove set forth.
| NSI SOFTWARE, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| ABS CAPITAL PARTNERS IV, L.P. By: ABS Partners IV, LLC Its: General Partner |
||||
| By: | ||||
| Name: | Xxxxx Xxxx | |||
| Title: | Managing Member | |||
| ABS CAPITAL PARTNERS IV-A, L.P. By: ABS Partners IV, LLC Its: General Partner |
||||
| By: | ||||
| Name: | Xxxxx Xxxx | |||
| Title: | Managing Member | |||
[Signature Page to Amended and Restated Registration Rights Agreement]
| ABS CAPITAL PARTNERS IV OFFSHORE, L.P. By: ABS Partners IV, LLC Its: General Partner |
||||
| By: | ||||
| Name: | Xxxxx Xxxx | |||
| Title: | Managing Member | |||
| ABS CAPITAL PARTNERS IV SPECIAL OFFSHORE, L.P. By: ABS Partners IV, LLC Its: General Partner |
||||
| By: | ||||
| Name: | Xxxxx Xxxx | |||
| Title: | Managing Member | |||
[Signature Page to Amended and Restated Registration Rights Agreement]
| XXXXXXXX COMMUNICATIONS AND INFORMATION FUND, INC. | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXXXXX INVESTMENT OPPORTUNITIES (MASTER) FUND-NTV PORTFOLIO | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXXXXX INVESTMENT OPPORTUNITIES (MASTER) FUND-NTV II PORTFOLIO J&W | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXXXXX NEW TECHNOLOGIES FUND, INC. | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
[Signature Page to Amended and Restated Registration Rights Agreement]
| DELL USA LP | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| THE XXXXXX REVOCABLE LIVING TRUST | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXXXXX XXXXXX | ||||||
| XXXXXXX XXXXXXXX | ||||||
| XXXXXXX XXXXXXXXX | ||||||
[Signature Page to Amended and Restated Registration Rights Agreement]
| XXXXXXX XXXXXXX | ||||||
| XXXXXX X. XXXX | ||||||
| XXXX XXXXX | ||||||
| XXXXXXX L. XXXX | ||||||
| XXXX SILVER | ||||||
| XXXXXXX XXXXXXXXX | ||||||
| XXXXXXX XXXXXXXXX | ||||||
| XXXXX XXX | ||||||
| XXXXXX X. XXXXXXX | ||||||
[Signature Page to Amended and Restated Registration Rights Agreement]
| XXXXX X. XXXXXXXX | ||||||
| XXXXX XXXXXX | ||||||
| XXXXXX X. XXXXXX, XX. | ||||||
| XXXXX XXXXXX | ||||||
| XXXXX XXXXXX | ||||||
| ALLIANCE CAPITAL INVESTMENT CORP. | ||||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXXX X. XXXXXXXXX | ||||||
[Signature Page to Amended and Registration Rights Agreement]
| XXXXXXX | XXXXXX | |||||
[Signature Page to Amended and Restated Registration Rights Agreement]
Exhibit A
Series B Investors
ABS Capital Partners IV L.P. |
||||
ABS Capital Partners IV–A L.P. |
||||
ABS Capital Partners IV Offshore, L.P. |
||||
ABS Capital Partners IV Offshore Special, X.X. |
||||
Xxxxxxxx Communications and Information Fund, Inc. |
||||
Xxxxxxxx Investment Opportunities (Master) Fund-NTV Portfolio |
||||
Xxxxxxxx Investment Opportunities (Master) Fund-NTV II Portfolio |
||||
Xxxxxxxx New Technologies Fund, Inc. |
||||
Dell USA LP |
||||
The Xxxxxx Revocable Living Trust |
||||
Alliance Capital Investment Corp. |
||||
Xxxxxxxx Xxxxxx |
||||
Xxxxxxx Xxxxxxxx |
||||
Xxxxxxx Xxxxxxxxx |
||||
Xxxxxxx Xxxxxxx |
||||
Xxxxxx X. Xxxx |
||||
Xxxx Xxxxx |
||||
Xxxxxxx L. Xxxx |
||||
Xxxx Silver |
||||
Xxxxxxx Xxxxxxxxx |
||||
Xxxxxxx Xxxxxxxxx |
||||
Xxxxx Xxx |
||||
Xxxxxx X. XxXxxxx |
||||
Xxxxx X.Xxxxxxxx |
||||
Xxxxx Xxxxxx |
||||
Xxxxxx X. Xxxxxx, Xx. |
||||
Xxxxx Xxxxxx |
||||
Xxxxx Xxxxxx |
||||
Xxxxxx X. Xxxxxxxxx |
||||
Xxxxxxx Xxxxxx |
Exhibit B
Series C Investors
ABS Capital Partners IV, L.P. |
||||
ABS Capital Partners IV-A, L.P. |
||||
ABS Capital Partners IV Offshore, L.P. |
||||
ABS Capital Partners IV Special Offshore, L.P. |
TABLE OF CONTENTS
| Page | ||||||||
| 1. | REGISTRATION RIGHTS | 2 | ||||||
| 1.1.1 | Demand Registration Rights | 2 | ||||||
| 1.1.2. Demand Procedures | 2 | |||||||
| 1.1.3. Delay by Company | 3 | |||||||
| 1.1.4. Reduction | 3 | |||||||
| 1.1.5. Withdrawal | 4 | |||||||
| 1.2. | Piggyback Registration Rights | 4 | ||||||
| 1.2.1. Request | 4 | |||||||
| 1.2.2. Reduction | 5 | |||||||
| 1.3. | Registration on Form S-3 | 5 | ||||||
| 1.4. | Registration Procedures | 5 | ||||||
| 1.5. | Holdback Agreement | 7 | ||||||
| 1.6. | Registration Expenses | 8 | ||||||
| 1.6.1. Holder Expenses | 8 | |||||||
| 1.6.2. Company Expenses | 8 | |||||||
| 1.6.3. Indemnity and Contribution | 9 | |||||||
| 1.7. | Grant and Transfer of Registration Rights | 11 | ||||||
| 1.8. | Information from Holder | 12 | ||||||
| 1.9 | Rule 144 Requirements | 12 | ||||||
| 1.10 | Sale of Series B Stock or Series C Stock to Underwriter | 12 | ||||||
| 1.11 | Changes in Series B Stock, Series C Stock or Common Stock | 12 | ||||||
| 2. | DEFINITIONS | 13 | ||||||
| 3. | MISCELLANEOUS | 14 | ||||||
| 3.1. | Entire Agreement; Amendment | 14 | ||||||
| 3.2. | Waiver | 14 | ||||||
| 3.3. | Termination | 15 | ||||||
| 3.4. | No Third Party Beneficiaries | 15 | ||||||
| 3.5. | Binding Effect | 15 | ||||||
| 3.6. | Governing Law | 15 | ||||||
| 3.7. | Notices | 15 | ||||||
| 3.8. | Execution in Counterparts | 17 | ||||||
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