EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of this 1/st/ day of March, 1999, by and among XXXXXXXX.XXX,
INC., a Delaware corporation (the "Company"), and the undersigned holder of
Series C Convertible Preferred Stock of the Company (the "Series C Holder").
WHEREAS, the Series C Holder has agreed to purchase 89,704 shares of
the Series C Convertible Preferred Stock of the Company (the "Shares"); and
WHEREAS, the Company has agreed to provide the Series C Holder with
certain rights relating to the registration and sale of the Shares.
NOW, THEREFORE, in consideration of the covenants and promises
contained herein, the parties agree as follows:
ARTICLE 1 - REGISTRATION RIGHTS
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1.1 Definitions. For purposes of this Article 1, the following terms
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shall have the following respective meanings:
(a) "Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute enacted hereafter, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
(b) "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Act.
(c) "Common Stock" shall mean the Class A Common Stock, no par value
per share, of the Company.
(d) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of effectiveness of such
registration statement by the Commission.
(e) "Registrable Securities" shall mean (i) shares of Common Stock
issued or issuable upon conversion of the Shares and (ii) any other shares of
Common Stock issued in respect of the Shares (on account of stock splits, stock
dividends, reclassifications, recapitalizations or similar events); provided,
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however, that shares of Common Stock which are Registrable Shares shall cease to
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be Registrable Shares (i) upon any sale pursuant to a Registration Statement or
Rule 144 under the Act or (ii) upon any sale in any manner to a person or entity
which, by virtue of Section 1.10 of this Agreement, is not entitled to the
rights provided by this Agreement.
1.2 Piggyback Registration. Subject to Section 1.8 of this
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Agreement, if at any time the Company proposes to register any of its securities
under the Act, either for its own account or
for the account of others, in connection with the public offering of such
securities solely for cash, on a registration form that would also allow the
registration of the Registrable Securities, the Company shall, each such time,
promptly give the Series C Holder written notice of such proposed registration.
This provision shall not apply to a registration solely of securities issued or
issuable in connection with any stock option plan or other employee benefit plan
or in connection with a merger or acquisition. Upon receipt by the Company of
the written request of the Series C Holder given within twenty (20) days after
mailing of any such notice by the Company, the Company shall use its best
efforts to cause to be included in such registration under the Act all the
Registrable Securities that the Series C Holder has requested be registered.
1.3 Obligations of the Company. Whenever required under this
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Agreement to use its best efforts to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Commission a registration statement
covering such Registrable Securities and use its best efforts to cause such
registration statement to be declared effective by the Commission as
expeditiously as possible and to keep such registration effective until the
earlier of (i) the date when all Registrable Securities covered by the
registration statement have been sold or (ii) 180 days from the effective date
of the registration statement.
(b) Prepare and file with the Commission such amendments and post-
effective amendments to such registration statement as may be necessary to keep
such registration statement effective during the period referred to in Section
1.3(a) and to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement, and cause
the prospectus to be supplemented by any required prospectus supplement, and as
so supplemented to be filed with the Commission pursuant to Rule 424 under the
Act.
(c) Furnish to the Series C Holder such numbers of copies of such
registration statement, each amendment thereto, the prospectus included in such
registration statement (including each preliminary prospectus), and each
supplement thereto as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the Registrable
Securities under the securities laws of such jurisdictions in which the Company
shall also register securities to be sold by the Company pursuant to the same
registration under the Act.
(e) Promptly notify the Series C Holder (if such Series C Holder
holds Registrable Securities) at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading and, at the request of the Series C Holder,
the Company will prepare promptly a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not
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contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading.
(f) Provide a transfer agent for all such Registrable Securities not later
than the effective date of such registration statement.
(g) Enter into underwriting agreements and related agreements in customary
form for any primary offering.
(h) Promptly notify the Series C Holder (if such Series C Holder holds
Registrable Securities) and the underwriters, if any, of the following events
and (if requested by any such person) confirm such notification in writing: (1)
the filing of the prospectus or any prospectus supplement and the registration
statement and any amendment or post-effective amendment thereto and, with
respect to the registration statement or any post-effective amendment thereto,
the declaration of the effectiveness of such documents, (2) any requests by the
Commission for amendments or supplements to the registration statement or the
prospectus or for additional information, (3) the issuance of any stop order
suspending the effectiveness of the registration statement, and (4) the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction.
(i) Whenever any provision of this Agreement requires the Company to
furnish any information to the Series C Holder or its agents or representatives,
the Company may require any such person or entity to execute and deliver a
reasonable confidentiality agreement, agreement to refrain from trading or any
other agreement necessary or prudent to protect the Company or its officers,
directors and employees against xxxxxxx xxxxxxx liabilities and may restrict
access to confidential trade secret information.
1.4 Furnish Information. In the event of any registration by the
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Company, the Series C Holder shall furnish to the Company such information
regarding itself, the Registrable Securities and other securities of the Company
held by such holder, and the intended method of disposition of such Registrable
Securities as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company. It shall be a condition
precedent to the obligation of the Company to include any Registrable Securities
of the Series C Holder in a registration effected pursuant to this Agreement for
the Series C Holder to have provided the Company with such written information
regarding the registration of such Registrable Securities as the Company shall
reasonably request.
1.5 Suspension of Disposition of Registrable Securities. The Series C
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Holder agrees by acquisition of such Registrable Securities that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 1.3(e) or 1.3(h)(2), 1.3(h)(3) or 1.3(h)(4) hereof, the
Series C Holder will forthwith discontinue disposition of Registrable Securities
until its receipt of copies of a supplemented or amended prospectus contemplated
by Section 1.3(e) hereof, or until it is advised in writing by the Company that
the use of the
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prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the prospectus, or
in the case of Section 1.3(h)(2), 1.3(h)(3) or 1.3(h)(4), until the Company
notifies the Series C Holder in writing that sales of Registrable Securities may
continue. If so directed by the Company, the Series C Holder will deliver to the
Company (at the expense of the Company) all copies, other than permanent file
copies then in the Series C Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
1.6 Expenses of Registration.
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The Series C Holder shall bear the fees and expenses of their such holder's
own counsel and shall bear any additional registration and qualification fees
and expenses (including underwriters' discounts and commissions and transfer
taxes), and any additional costs and disbursements of counsel for the Company
that result solely from the inclusion of Registrable Securities held by the
Series C Holder in such registration. All other expenses of such registrations
shall be borne by the Company.
1.7 Underwriting Requirements; Priorities.
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(a) The Company shall have the right to select the investment banker(s)
and/or manager(s) to administer any offering to which this Agreement is
applicable. If a registration is an underwritten primary registration on behalf
of the Company (without regard to registration rights arising hereunder or under
any other agreement), 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 at the desired price
in such offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration by the Series C Holder and the
securities requested to be included therein by holders of securities with
contractual registration rights other than the Series C Holder, pro rata among
the holders of all such securities on the basis of the number of Registrable
Securities or shares requested to be included therein, and (iii) third, other
securities requested to be included in such registration, pro rata among the
holders thereof on the basis of the number of shares requested to be registered.
If a registration is an underwritten secondary registration on behalf of holders
of securities of the Company, or a combined primary and secondary offering, 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 at the desired price in such offering, the Company
will include in such registration (i) first, securities the Company proposes to
sell, (ii) second, the securities requested to be included therein by holders of
securities with contractual registration rights that are senior to those of the
Series C Holder, pro rata among the holders of such securities on the basis of
the number of shares requested to be included therein, (iii) third, the
securities requested to be included therein by the Series C Holder and by the
holders of securities with contractual registration rights that are in parity
with the rights of the Series C Holder, pro rata among such Series C Holder and
other holders on the basis of the number of
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shares requested to be included therein, and (iv) fourth, other securities
requested to be included in such registration, including securities to be sold
by holders without contractual registration rights.
(b) The Series C Holder may not participate in any underwritten
registration hereunder unless the Series C Holder (i) agrees to sell its
securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
1.8 Limitation of the Company's Obligations.
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(a) The Company may, in its sole discretion, postpone or withdraw any
registration in which Registrable Securities have been included pursuant to this
Agreement without obligation to the Series C Holder.
(b) The Company shall not be obligated under this Agreement to register
or include in any registration Registrable Securities that the Series C Holder
has requested to be registered if the Company shall furnish the Series C Holder
with a written opinion of counsel reasonably satisfactory to the Series C
Holder, that all Registrable Securities that the Series C Holder holds may be
publicly offered, sold and distributed without registration under the Act
pursuant to Rule 144 promulgated by the Commission under the Act in any three-
month period without restriction as to the amount of securities that can be
sold.
(c) The Company may, in its sole discretion, grant to any owner of
securities of the Company registration rights of any kind or nature.
1.9 Lockup Agreement. For so long as the Series C Holder has the right
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to have Registrable Securities included in any registration pursuant to this
Agreement, the Series C Holder agrees in connection with any registration of the
Company's securities, upon the request of the underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, pledge, grant any option for the purchase of or otherwise dispose of
any Registrable Securities (other than those included in the registration)
without the prior written consent of the Company or such underwriters, as the
case may be, during the seven (7) days prior to and during the 180-day period
beginning on the effective date of such registration, as the Company or the
underwriters may specify. This provision shall apply whether or not any
Registrable Securities of the Series C Holder are included in the offering.
1.10 Transfer of Registration Rights. Provided that the Company is given
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written notice by the Series C Holder at the time of such transfer stating the
name and address of the transferee and identifying the securities with respect
to which the rights under this Agreement are being assigned and such transferee
agrees in writing to be bound by the terms of this Agreement,
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the registration rights under this Agreement may be transferred in whole or in
part at any time to any transferee of Registrable Securities. Upon such
transfer, the transferee shall be deemed to be the Series C Holder for all
purposes hereunder.
1.11 Indemnification and Contribution. In the event any Registrable
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Securities are included in a registration statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify and hold harmless the Series C Holder (if such holder's
Registrable Securities are included in a registration), each director, officer,
partner, employee, or agent for the Series C Holder, any underwriter (as defined
in the Act) for the Series C Holder, and each person, if any, who controls the
Series C Holder or underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Act and applicable state securities laws insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based on any untrue or alleged untrue statement of any
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
in light of the circumstances under which they were made or necessary to make
the statements therein not misleading or arise out of any violation by the
Company of any rule or regulation promulgated under the Act applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration; and will reimburse each such person or entity for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld) nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by or on behalf
of the Series C Holder, underwriter or controlling person.
(b) To the fullest extent permitted by law, the Series C Holder (if such
holder's Registrable Securities are included in a registration under this
Agreement), will, and hereby does, indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the meaning of
the Act, and any underwriter for the Company (within the meaning of the Act),
against any losses, claims, damages or liabilities, joint or several, to which
the Company or any such director, officer, controlling person or underwriter may
become subject, under the Act and applicable state securities laws, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
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of any material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or arise out of or are based upon 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 in light of the
circumstances, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in such registration statement, preliminary or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by the Series C Holder expressly for use in
connection with such registration; and the Series C Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, controlling person or underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Series C Holder (which consent shall not be unreasonably
withheld).
In no event shall the liability by reason of this contractual indemnity of
the Series C Holder hereunder be greater than the dollar amount of the proceeds
received by the Series C Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation. If the Series C Holder is
required to indemnify the Company as provided above, it shall cease to have the
right to participate in any other registration pursuant to this Agreement.
(c) In order to provide for just and equitable contribution to joint
liability under the Act in circumstances in which the indemnity provisions
provided for in this section are for any reason held to be unavailable to the
indemnified parties although applicable in accordance with its terms; then, in
each such case, the Company and the Series C Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportions as shall be appropriate to
reflect the relative fault of the Company, on the one hand, and the Series C
Holder, on the other hand, with such relative fault 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 Company or by the Series C Holder, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that, in any such case,
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(A) the Series C Holder will not be required to contribute any amount in excess
of the proceeds to it of all Registrable Securities sold by it pursuant to such
registration statement, and (B) no person or entity guilty of fraudulent
misrepresentation, within the meaning of Section 11(f) of the Act, shall be
entitled to contribution from any person or entity who is not guilty of such
fraudulent misrepresentation.
ARTICLE 2 - MISCELLANEOUS
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2.1 Amendments and Waivers. The provisions of this Agreement, including
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the provisions of this sentence, may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given, by
written consent of the Company and
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the Series C Holder. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
2.2 Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
2.3 Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
2.4 Notices. All notices required or permitted to be sent shall be sent
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to the addresses of the parties set forth on their respective signature pages,
or to such other address as any party shall provide to the other parties in a
notice sent in accordance with this Agreement. Any notice sent by registered or
certified mail, return receipt requested, or by Federal Express or other
reputable nationwide overnight delivery service, shall be deemed to have been
received by the party to whom it was sent upon receipt of confirmation of
delivery if sent by registered or certified mail and one day following the date
it was sent if sent by Federal Express or other reputable nationwide overnight
delivery service. Any notice sent by any other means shall be deemed to have
been received when it is actually received at the address provided above.
2.5 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of North Carolina.
2.6 Severability. In the event that any one or more of the provisions
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contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
2.7 Entire Agreement. This Agreement is intended by the parties as a
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final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter. Nothing
in this Agreement shall preclude the Company from entering into any other
agreement having the same or different terms with any third party with respect
to registration rights or related matters.
2.8 Parties Benefited. Nothing in this Agreement, express or implied, is
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intended to confer upon any third party any rights, remedies, obligations or
liabilities.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement under seal
as of the date provided below.
THE COMPANY:
XXXXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
THE SERIES C HOLDER:
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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