Exhibit 10.4
GRANDE COMMUNICATIONS HOLDINGS,
INC.
FIFTH AMENDED AND
RESTATED
INVESTOR RIGHTS
AGREEMENT
This Fifth Amended and Restated
Investor Rights Agreement (the “Agreement”) is entered
into as of this day of November,
2005 by and among Grande Communications Holdings, Inc., a Delaware
corporation (the “Company”), each existing holder of
Preferred Stock and Warrants of the Company set forth on
Schedule 1 attached hereto (each an “Current
Investor” and collectively the “Current
Investors”), each existing holder of Common Stock of the
Company set forth on Schedule 2 attached hereto (each a
“Founder” and collectively the “Founders”).
The Current Investors and any holder of any shares of the newly
created series of Series H Preferred Stock (“Series H
Holder”) or other person or entity that becomes a party to
this Agreement pursuant to Section 8.13 hereof are referred to
collectively as the “Investors,” and the Investors and
the Founders are referred to collectively as the
“Stockholders.”
RECITALS
A. The Company, the Current Investors and the
Founders are parties to that certain Fourth Amended and Restated
Investor Rights Agreement dated October 27, 2003 (the
“Investor Rights Agreement”).
C. The Company and the Current Investor and Founder
signatories hereto desire to hereby amend and restate the Investor
Rights Agreement to, among other things, provide for the future
issuance of shares of the newly created series of Series H
Preferred Stock. The holders of Series H Preferred Stock will
become parties to this Agreement from time to time upon the
execution by such holder of a joinder to this Agreement in
accordance with Section 8.13 hereof and will have the rights
and obligations of an “Investor” and a
“Stockholder” hereunder.
AGREEMENT
N OW ,
T HEREFORE
, in consideration of the foregoing
recitals and the mutual promises hereinafter set forth and set
forth in the Series A Purchase Agreements, the Series B Purchase
Agreement, the Series C Purchase Agreement the Merger Agreement,
the Series F Purchase Agreement and the Series G Purchase
Agreement, the parties hereto agree as follows:
SECTION 1. G
ENERAL .
1.1 Definitions
. As used in this Agreement, the
following terms shall have the following respective
meanings:
“ C
OMMON S TOCK ” means the Company’s Common Stock,
$0.001 par value per share.
“ E
QUITY S ECURITIES ” means (i) any shares of Common
Stock, Preferred Stock or other security of the Company,
(ii) any security or instrument convertible into or
exercisable or exchangeable for, with or without consideration, any
shares of Common Stock, Preferred Stock
or other security of the Company (including the
Warrants and any option, warrant or right to subscribe for or
purchase such a security or instrument), (iii) any security or
instrument carrying any option, warrant or right to subscribe for
or purchase any shares of Common Stock, Preferred Stock or other
security of the Company, or (iv) any such option, warrant or
right.
“ E
XCHANGE A CT ” means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated by the
SEC thereunder.
“ F
EBRUARY S ERIES A P URCHASE A GREEMENT ” means Series A Preferred Stock Purchase
Agreement dated as of February 24, 2000 by and between the
Company and the other parties thereto.
“ F
ORM S-3 ” means such form under the Securities Act
as in effect on the date hereof or any successor registration form
under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the
SEC.
“ H
OLDER ” means any Investor who holds Registrable
Securities and any holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been
transferred in compliance with Section 2.11 below.
“ I
NITIAL O FFERING ” means the Company’s first firm
commitment underwritten public offering of its Common Stock
registered under the Securities Act.
“M
ERGER A GREEMENT ” means that certain Agreement and Plan of Merger
dated April 25, 2002 by and between the Company and the other
parties thereto.
“ P
ERMITTED
T RANSFEREE ” means (i) an affiliate of a
Stockholder, (ii) a Stockholder’s family members or a
trust for the benefit of an individual Stockholder and/or his
family members, (iii) a Stockholder’s affiliated or
related venture capital funds (if the Stockholder is a venture
capital fund investor), (iv) a Stockholder’s partners or
retired partners in accordance with partnership interests (if the
Stockholder is a partnership), (v) a Stockholder’s
members or former members in accordance with their interest in the
limited liability company (if the Stockholder is a limited
liability company), (vi) a Stockholder’s shareholders in
accordance with their interest in the corporation (if the
Stockholder is a corporation), (vii) any distribution in
connection with the dissolution, winding-up or liquidation of a
Stockholder, (viii) a transferee of a Stockholder by will or
the laws of intestate succession, and (ix) the Company for
acquisitions from holders of Common Stock by the Company pursuant
to agreements which permit the Company to repurchase such shares
upon termination of services to the Company at such holders’
cost, including, without limitation, an acquisition of Common Stock
in accordance with Section 2.4(d) of the Prior Management
Agreement.
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“ P
REFERRED
S TOCK ” means the Company’s Preferred
Stock, $.001 par value per share, and any series
thereof.
“ P
RIOR M ANAGEMENT A GREEMENT ” means that certain Amended and Restated
Stockholders Agreement entered into by the Company and members of
the Company’s management dated as of February 11, 2000,
and as amended February 22, 2000.
“ P
RIOR E XISTING S TOCKHOLDERS A GREEMENT ” means that certain Stockholders
Agreement entered into by the Company, KNOLOGY, Inc., and
ClearSource, Inc., dated as of February 11, 2000.
“ Q
UALIFIED
H OLDER ” means an Investor (including any group
of affiliated or related funds, in the case of an Investor that is
a venture capital fund investor) who or which holds at least
fifteen million (15,000,000) Shares (as adjusted for stock
splits, stock dividends, recapitalizations and similar
events).
“ Q
UALIFIED
P UBLIC O FFERING ” means a firm commitment underwritten
public offering pursuant to an effective registration statement
under the Securities Act covering the offer and sale of Common
Stock for the account of the Company in which the per share sales
price of such Common Stock to the public is at least $1.30 (as
adjusted for any stock dividends, combinations, splits,
recapitalizations and similar events) and the gross proceeds to the
Company (prior to deduction of underwriting discounts, commissions
and fees) are at least $150,000,000.
“ R
EGISTER ,” “ REGISTERED ,” and “ REGISTRATION ” mean a registration effected by
preparing and filing a registration statement in compliance with
the Securities Act and applicable rules and regulations thereunder,
and the declaration or ordering of the effectiveness of such
registration statement.
“ R
EGISTRABLE
S ECURITIES ” means (i) any Common Stock of the
Company held by the Investors, (ii) any Common Stock of the
Company issued or issuable upon the conversion, exercise or
exchange of any Equity Securities held by the Investors, and
(iii) any Common Stock of the Company issued as (or issuable
upon the conversion, exercise or exchange of any warrant, right or
other security which is issued as) or by way of a stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, or other reorganization or
other distribution with respect to, or in exchange for or in
replacement of, any Equity Securities held by the Investors.
Notwithstanding the foregoing, Registrable Securities shall cease
to be Registrable Securities when such securities are sold to the
public either pursuant to a registration statement or
Rule 144.
“ R
EGISTRATION
E XPENSES ” means all expenses incurred by the
Company in complying with Sections 2.2, 2.3, 2.4 and 2.5 below,
including, but not limited to, all registration and filing fees
(exclusive of underwriting discounts and commissions), printing
expenses, fees and disbursements of counsel for the Company, blue
sky fees and expenses, the expense of any
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special audits incident to or required by any
such registration (but excluding the compensation of regular
employees of the Company which shall be paid in any event by the
Company), and the reasonable fees and disbursements of a single
special counsel for the Holders (not to exceed $15,000).
“ R
ESTATED C ERTIFICATE ” means the Company’s Certificate of
Incorporation, as amended and/or restated from time to
time.
“ S
ECURITIES
A CT ” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
“ S
ELLING E XPENSES ” means all underwriting discounts,
selling commissions and stock transfer taxes applicable to the sale
of Registrable Securities and fees and disbursements of counsel for
any Holder (other than the fees and disbursements of counsel to the
selling Holders included in the Registration Expenses).
“ S
ERIES A P REFERRED S TOCK ” means Series A preferred stock, $0.001
par value per share, of the Company.
“ S
ERIES A P URCHASE A GREEMENTS ” means the February Series A Purchase
Agreement and the Series A Preferred Stock Purchase Agreement dated
as of June 22, 2000 by and between the Company and the other
parties thereto.
“ S
ERIES B P REFERRED S TOCK ” means Series B preferred stock, $0.001
par value per share, of the Company.
“ S
ERIES B P URCHASE A GREEMENT ” means the Series B Preferred Stock
Purchase Agreement dated as of September 19, 2000 by and
between the Company and the other parties thereto.
“ S
ERIES C P REFERRED S TOCK ” means Series C preferred stock, $0.001
par value per share, of the Company.
“ S
ERIES C P URCHASE A GREEMENT ” means the Series C Preferred Stock
Purchase Agreement dated as of October 29, 2001 by and between
the Company and the other parties thereto.
“S
ERIES D P REFERRED S TOCK ” means Series D preferred stock, $0.001
par value per share, of the Company.
“S
ERIES E P REFERRED S TOCK ” means Series E preferred stock, $0.001
par value per share, of the Company.
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“S
ERIES F P REFERRED S TOCK ” means Series F preferred stock, $0.001 par value
per share, of the Company.
“S
ERIES F P URCHASE A GREEMENT ” means the Series F Preferred Stock Purchase
Agreement dated as of November 18, 2002 by and between the
Company and the other parties thereto.
“S
ERIES G P REFERRED S TOCK ” means Series G Preferred Stock, $0.001 par value
per share, of the Company.
“S
ERIES G P REFERRED S TOCK H OLDER ” means the certain Current Investors and the New
Investors that are party to the Series G Purchase
Agreement.
“S
ERIES G P URCHASE A GREEMENT ” means the Series G Preferred Stock Purchase
Agreement dated as of October 27, 2003 by and between the
Company and the other parties thereto.
“S
ERIES H P REFERRED S TOCK ” means Series H Preferred Stock, $0.001 par value
per share, of the Company.
“ S
HARES ” means (i) shares of Series A
Preferred Stock, shares of Series B Preferred Stock, shares of
Series C Preferred Stock, shares of Series D Preferred Stock,
shares of Series E Preferred Stock, shares of Series F Preferred
Stock, shares of Series G Preferred Stock and shares of Series H
Preferred Stock, and (ii) any other shares of Preferred Stock
into which such shares are converted pursuant to the “Pay to
Play Anti-Dilution Adjustment” provisions of the Restated
Certificate.
“ SEC ” or
“ C OMMISSION ” means the Securities and Exchange
Commission.
“ W
ARRANTS ” means the warrants to acquire shares of
Common Stock in the Company issued pursuant to the Series G
Purchase Agreement.
1.2 Methodology for
Calculations. Except as
otherwise provided in this Agreement, for purposes of calculating
(i) the number of shares of Registrable Securities, Preferred
Stock, Shares, Common Stock or Equity Securities outstanding as of
any date, (ii) the number of shares of Registrable Securities,
Preferred Stock, Shares, Common Stock or Equity Securities held by
a party, and (iii) all related percentages and ratios, all
such securities shall be treated as having been converted into, or
exercised or exchanged for, Common Stock ( i.e., all such
calculations shall be made on a fully diluted, converted, exercised
and exchanged basis). Whenever reference is made in this Agreement
to a specific number of shares of Registrable Securities, Preferred
Stock, Shares, Common Stock or Equity Securities, such number shall
be proportionally adjusted in the event of any stock dividends,
combinations, splits, recapitalizations and similar
events.
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SECTION 2. R EGISTRATION ; R ESTRICTIONS ON T RANSFER .
2.1 Restrictions on
Transfer.
(a) Each Holder agrees not to make
any disposition of any Shares, Warrants or Registrable Securities
unless and until:
(i) There is then in effect a
registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance
with such registration statement; or
(ii) (A) The transferee has
agreed in writing to be bound by the terms of this Agreement,
(B) such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, and (C) if reasonably requested by the Company,
such Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.
Notwithstanding the provisions of
paragraphs (i) and (ii) above, no such registration
statement or opinion of counsel shall be necessary for a transfer
by a Holder (i) to its partners or retired partners in
accordance with partnership interests (if the Holder is a
partnership), (ii) to an affiliate of such Holder,
(iii) to its members or former members in accordance with
their interest in the limited liability company (if the Holder is a
limited liability company), (iv) to its shareholders in
accordance their percentage ownership interest in the corporation
(if the Holder is a corporation), (v) to its affiliated or
related venture capital funds (if the Holder is a venture capital
fund investor), or (vi) to such Holder’s family members
or to a trust for the benefit of an individual Holder and/or his or
her family members; provided, however, that, subject to the
provisions of Section 2.11 below, the transferee shall be
subject to the terms of this Agreement to the same extent as if
such transferee were an original Holder hereunder.
(b) Each certificate representing
Shares, Warrants and Registrable Securities shall (unless otherwise
permitted by the provisions of the Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the
following (in addition to any other legend required under
applicable state securities laws or as provided elsewhere in this
Agreement):
THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF
ANY OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE
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TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED OR QUALIFIED UNDER THE ACT
AND THE SECURITIES LAWS OF ANY OTHER APPLICABLE JURISDICTION OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated
to reissue promptly unlegended certificates at the request of any
holder thereof if the holder shall have obtained an opinion of
counsel (which counsel may be counsel to the Company) reasonably
acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.
(d) Any legend endorsed on an
instrument pursuant to applicable state securities laws and the
stop-transfer instructions with respect to such securities shall be
removed upon receipt by the Company of an order of the appropriate
Blue Sky authority authorizing such removal.
2.2 Demand
Registration.
(a) Subject to the conditions of
this Section 2.2, other than from a Series H Holder, if the
Company shall receive a written request from Holders (one of whom
must be either Centennial or Whitney & Co., each as
defined below) holding twenty-five percent (25%) or more of
the Registrable Securities then held by all Holders (the
“Initiating Holders”) that the Company file a
registration statement under the Securities Act, and under the
securities or Blue Sky laws of any jurisdiction designated by such
Holders, covering Registrable Securities having an aggregate
offering price to the public of not less than $5,000,000, then the
Company shall, within fifteen (15) days of the receipt
thereof, give written notice of such request to all Holders, and
subject to the limitations of this Section 2.2, use its best
efforts to effect the registration under the Securities Act of all
Registrable Securities that the Holders request to be
registered.
(b) If the Initiating Holders
holding a majority of the Registrable Securities held by such
Holders to which the request made pursuant to Section 2.2(a)
relates intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to this
Section 2.2, and the Company shall include such information in
the written notice referred to in Section 2.2(a). In such
event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion
of such Holder’s Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the
Initiating Holders) to the extent provided herein. All Holders,
other than from a Series H Holder, proposing to distribute their
securities through such underwriting
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shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating
Holders (which underwriter or underwriters shall be an investment
banking firm(s) of national reputation and shall be reasonably
acceptable to the Board of Directors of the Company).
Notwithstanding any other provision of this Section 2.2, if
the underwriter advises the Company in writing that, in its
opinion, marketing factors require a limitation of the number of
securities to be underwritten (including Registrable Securities),
then the Company shall so advise all Holders other than from a
Series H Holder who or which hold Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of
shares that may be included in the underwriting, without
jeopardizing the success of such underwriting, shall be allocated
first to the Series G Preferred Stock Holders to the extent of
(i) the number of shares of Common Stock issuable upon
conversion of the Series G Preferred Stock plus (ii) two
shares of Common Stock issued or issuable upon exercise of the
Warrants held by such Series G Preferred Stock Holders (as adjusted
for adjustments to the number of shares of Common Stock issuable
thereunder pursuant to Section 5 of the form of Warrant), and
then to the remaining Holders (including the Initiating Holders and
the Series G Preferred Stock Holders, to the extent not already
allocated) on a pro rata basis based on the number of Registrable
Securities held by each such Holder, provided, however, that the
number of shares of Registrable Securities to be included in such
underwriting and registration shall not be reduced unless all other
securities of the Company are first entirely excluded from the
underwriting and registration. Any Registrable Securities excluded
or withdrawn from such underwriting shall be withdrawn from the
registration. To be clear, the holders of Series H Preferred Stock
shall not have any of the rights articulated in this
Section.
(c) The Company shall not be
required to effect a registration pursuant to this
Section 2.2:
(i) before the Initial Offering;
or
(ii) after the Company has effected
four (4) registrations pursuant to this Section 2.2, and
such registrations have been declared or ordered effective;
or
(iii) during the period starting
with the date of filing of, and ending on the date one hundred
eighty (180) days following the effective date of a
registration statement pertaining to any public offering of the
Company’s stock, provided that the Company makes reasonable
good faith efforts to cause such registration statement to become
effective; or
(iv) if, within thirty
(30) days of receipt of a written request from Initiating
Holders pursuant to Section 2.2(a), the Company gives notice
to the Holders of the Company’s intention to make a public
offering within ninety (90) days; or
(v) if the Company shall furnish to
Holders requesting a registration statement pursuant to this
Section 2.2, a certificate signed by the Chairman of the Board
stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously
8
detrimental to the Company and its shareholders
for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing
for a period of not more than one hundred eighty (180) days
after receipt of the request of the Initiating Holders; provided
that such right to delay a request shall be exercised by the
Company only once; or
(vi) if the Initiating Holders
propose to dispose of shares of Registrable Securities that may be
immediately registered on Form S-3 pursuant to a request made
pursuant to Section 2.4 below.
2.3 Piggyback
Registrations.
(a) The Company shall notify all
Holders other than from a Series H Holder in writing at least
thirty (30) days prior to the filing of any registration
statement under the Securities Act with respect to a public
offering of securities of the Company (including, but not limited
to, registration statements relating to secondary offerings of
securities of the Company, but excluding any Series G Shelf
Registration pursuant to Section 2.5 hereof and registration
statements relating to employee benefit plans or with respect to
corporate reorganizations or other transactions under Rule 145 of
the Securities Act) and will afford each such Holder other than
from a Series H Holder an opportunity to include in such
registration statement all or some of the Registrable Securities
held by such Holder. Each Holder other than from a Series H Holder
desiring to include in any such registration statement any of the
Registrable Securities held by it shall, within fifteen
(15) days after the receipt of the above-described notice from
the Company, so notify the Company in writing. Such notice shall
state the intended method of disposition of the Registrable
Securities held by such Holder. If a Holder other than from a
Series H Holder decides not to include all of its Registrable
Securities in any registration statement thereafter filed by the
Company, such Holder shall nevertheless continue to have the right
to include any of its Registrable Securities in any subsequent
registration statement or registration statements as may be filed
by the Company, all upon the terms and conditions set forth
herein.
(b) If the registration statement as
to which the Company gives notice under this Section 2.3 is
for an underwritten offering, the Company shall so advise the
Holders other than from a Series H Holder. In such event, the right
of any such Holder other than from a Series H Holder to include any
of its Registrable Securities in such registration shall be
conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable
Securities in the underwriting to the extent provided herein. All
Holders other than from a Series H Holder proposing to distribute
Registrable Securities through such underwriting shall enter into
an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company (which
underwriter or underwriters shall be an investment banking firm(s)
of national reputation and shall be reasonably acceptable to the
Holders other than from a Series H Holder holding a majority of the
Registrable Securities requested to be registered pursuant to this
Section 2.3). Notwithstanding any other provision of this
Agreement, if the managing underwriter determines in good faith,
and so advises the
9
Company in writing, that, in its opinion,
marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that the underwriter believes
may be included in the underwriting without jeopardizing the
success of such underwriting shall be allocated, first, to the
Company; second, to the Series G Preferred Stock Holders to the
extent of (i) the number of shares of Common Stock issuable
upon conversion of the Series G Preferred Stock plus (ii) two
shares of Common Stock issued or issuable upon exercise of the
Warrants held by such Series G Preferred Stock Holders (as adjusted
for adjustments to the number of shares of Common Stock issuable
thereunder pursuant to Section 5 of the form of Warrant);
third, to the remaining Holders other than from a Series H Holder
(including the Series G Preferred Stock Holders, to the extent not
already allocated) on a pro rata basis based on the number of
Registrable Securities held by each such Holder; and fourth, to any
shareholder of the Company (other than a Holder) on a pro rata
basis. In no event will shares of any other selling shareholder be
included in any registration which would reduce the number of
shares which may be included by the Holders other than from a
Series H Holder without the written consent of at least sixty-six
percent (66%) of the Registrable Securities to be included in
such registration.
(c) Right to Terminate Registration.
The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 2.3 prior to
the effectiveness of such registration whether or not any Holder
has elected to include Registrable Securities in such registration.
In such an event, the Registration Expenses of such withdrawn
registration shall be borne by the Company in accordance with
Section 2.6 hereof.
2.4 Form S-3
Registration . In case
the Company shall receive from Holders (one of whom must be either
Centennial or Whitney & Co.) other than from a Series H
Holder holding twenty-five percent (25%) or more of the
Registrable Securities then held by all Holders other than from a
Series H Holder a written request or requests that the Company
effect a registration on Form S-3 (or any successor to Form S-3) or
any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holders, the Company
will:
(a) promptly give written notice of
the proposed registration, and any related qualification or
compliance, to all other Holders other than from a Series H Holder;
and
(b) as soon as practicable, to
effect such registration and all such qualifications and
compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Holders’ Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any other Holder joining in such request as are
specified in a written request given to the Company within fifteen
(15) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated
to effect any such registration, qualification or compliance
pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or
similar form) is not available for such offering by the Holders;
or
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(ii) if the Holders other than from
a Series H Holder, together with the holders of any other
securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less
than $500,000; or
(iii) if the Company, within the
twelve (12) month period preceding the date of such request,
has already effected two (2) registrations on Form S-3
pursuant to this Section 2.4; or
(iv) during the period starting with
the date of filing of, and ending on the date one hundred eighty
(180) days following the effective date of, a registration
statement pertaining to any public offering of the Company’s
stock, provided that the Company makes reasonable good faith
efforts to cause such registration statement to become effective;
or
(v) if, within thirty (30) days
of receipt of a written request from Holders other than from a
Series H Holder pursuant to this Section 2.4, the Company
gives notice to the Holders and Founders of the Company’s
intention to make a public offering within ninety (90) days;
or
(vi) in any particular jurisdiction
in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting
such registration, qualification or compliance, excluding any
consent to service of process required by Blue Sky laws.
(c) Subject to the foregoing, the
Company shall file a Form S-3 registration statement covering
the Registrable Securities and other securities so requested to be
registered as soon as practicable after receipt of the request or
requests of the Holders therefor. In no event shall a request for
registration on a Form S-3 count as demand for registration
pursuant to Section 2.2.
2.5 Series G Shelf
Registration.
(a) The Company shall use its best
efforts to prepare and file with the Commission, as soon as
practicable following expiration or waiver of all lock-up
arrangements entered into by the Series G Preferred Stock Holders
in connection with the Initial Offering, a registration statement
(the “Series G Shelf Registration”) for an offering to
be made on a delayed or a continuous basis pursuant to Rule 415 (or
any appropriate similar rule that may be adopted by the Commission)
under the Securities Act. The Series G Shelf Registration shall
cover all shares of Common Stock, if any, into which the Series G
Preferred Stock is converted pursuant to Article IV,
Section 3(b)(ii) of the Restated Certificate (the
“Series G Special Conversion
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Shares”). The Series G Shelf Registration
shall be on a Form S-1, Form S-3 or another appropriate form
permitting registration of such Series G Special Conversion Shares
for resale by the Series G Preferred Stock Holders in the manner or
manners reasonably designated by them (including, without
limitation, an underwritten offering).
(b) Subject to the requirements of
the Securities Act, including, without limitation, requirements
relating to updating prospectuses through post-effective amendments
or otherwise, the Company shall use reasonable best efforts to keep
the Series G Shelf Registration continuously effective under the
Securities Act until the date on which all of the Series G Special
Conversion Shares are sold to the public either pursuant to a
registration statement or Rule 144.
(c) Notwithstanding anything
contrary in this Agreement, commencing ninety (90) days after
the effectiveness of the Series G Shelf Registration, the Company
may, not more than once in any 12-month period, and one additional
time during the term of this Agreement (but not within ninety
(90) days after termination of any other Suspension Event),
direct the Series G Preferred Stock Holders to suspend sales of
Series G Special Conversion Shares registered thereunder, if one or
more of the following events (a “Suspension Event”)
occurs pending negotiations relating to, or consummation of, a
material corporate transaction (i) that would require
additional disclosure of material information by the Company in the
Series G Shelf Registration, (ii) as to which the Company has
a bona fide business purpose for preserving confidentiality
and (iii) which renders the Company unable to comply with
Commission requirements, in each case under circumstances that
would make it impractical or inadvisable to cause the Series G
Shelf Registration to become effective or to promptly amend or
supplement the Series G Shelf Registration on a post-effective
basis, as applicable.
2.6 Expenses of
Registration. Except as
specifically provided herein, all Registration Expenses incurred in
connection with any registration, qualification or compliance
pursuant to the first two registration requests made pursuant to
Section 2.2 above and all Registration Expenses incurred in
connection with any registration, qualification, or compliance
pursuant to Sections 2.3, 2.4 or 2.5 above shall be borne by
the Company. All Selling Expenses incurred in connection with any
registrations pursuant to Sections 2.2, 2.3, 2.4 or 2.5 above
shall be borne by the holders of the securities so registered
pro rata on the basis of the number of shares so registered.
The Company shall not, however, be required to pay the Registration
Expenses of any registration proceeding begun but not declared
effective pursuant to Section 2.2 or 2.4, the request of which
has been subsequently withdrawn by the initiating Holders, unless
(a) the withdrawal is based upon material adverse information
concerning the Company of which the initiating Holders were not
aware at the time of such request, or (b) the Holders of at
least seventy-five percent (75%) of the Registrable Securities
then held by all Holders agree to forfeit their right to one
requested registration pursuant to Section 2.2 in which event
such right shall be forfeited by all Holders. If the Company is not
required to pay such Registration Expenses, such expenses shall be
borne by the Holders requesting such registration in proportion to
the number of shares of Registrable Securities for which
registration was requested. If the Company is required to pay the
Registration Expenses of a withdrawn offering pursuant to
clause (a) above, then the Holders shall not forfeit their
rights pursuant to Section 2.2 to a demand
registration.
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2.7 Obligations of the
Company. Whenever
required to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a
registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to one hundred eighty
(180) days or such longer period as is provided under
Section 2.5 hereto or, if earlier, until the Holder or Holders
have completed the distribution related thereto; provided,
however, that such one hundred eighty (180) day period
shall be extended for a period of time equal to the period the
Holder refrains from selling any securities included in such
registration at the request of the Company and an underwriter of
Common Stock (or other securities) of the Company.
(b) Prepare and file with the SEC
such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by
such registration statement for the period set forth in paragraph
(a) above.
(c) Furnish to the Holders such
number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its best efforts to register
and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such jurisdictions
as shall be reasonably requested by the Holders; provided,
however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business where
it would not otherwise be required to qualify but for this
Section 2.7(d) or to file a general consent to service of
process in any such states or jurisdictions, excluding any consent
to service of process required by Blue Sky laws.
(e) In the event of any underwritten
public offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the
managing underwriter(s) of such offering. Each Holder participating
in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder who or which
holds Registrable Securities covered by such registration statement
at any time when a prospectus relating thereto is required to
be
13
delivered under the Securities Act upon the
discovery that, or upon of the happening of any event as a result
of which, the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing. The Company will use its
best efforts to amend or supplement such prospectus in order to
cause such prospectus not to include any 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 not
misleading in the light of the circumstances then
existing.
(g) Use its best efforts to cause
all such Registrable Securities registered pursuant to this
Section 2 to be listed on each securities exchange on which
similar securities issued by the Company are then
listed.
(h) Provide a transfer agent and
registrar for all Registrable Securities registered pursuant to
this Section 2 and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration.
(i) Furnish, if such securities are
being sold through underwriters, at the request of the Holders of a
majority of the Registrable Securities registered thereunder, on
the date that such Registrable Securities are delivered to the
underwriters for sale, (i) an opinion, dated as of such date,
of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to the Holders of a majority of the Registrable
Securities registered thereunder, addressed to the underwriters, if
any, and (ii) a “comfort” letter dated as of such
date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an
underwritten public offering addressed to the
underwriters.
(j) The holders of Series H
Preferred Stock shall not have any of the rights articulated in
this Section 2.7.
2.8 Termination of Registration
Rights. All registration
rights granted under this Section 2 shall terminate and be of
no further force and effect five (5) years after the date of
the Company’s Initial Offering. In addition, a Holder’s
registration rights shall expire if all Registrable Securities held
by and issuable to such Holder may be sold under Rule 144
during any single ninety (90) day period; provided,
however , such Holder shall not lose its registration rights
hereunder if, (i) in the reasonable opinion of such Holder,
provided in writing to the Company’s Board of Directors, the
Holder’s ability to sell or otherwise transfer its securities
would be materially adversely affected, or (ii) such Holder
holds two percent (2%) or more of the then outstanding
Registrable Securities.
14
2.9 Delay of Registration;
Furnishing Information.
(a) No Holder shall have any right
to obtain or seek an injunction restraining or otherwise delaying
any such registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this
Section 2.
(b) In the event that a selling
Holder does not furnish to the Company upon written request by the
Company and within the periods specified in this Agreement such
information regarding itself, the Registrable Securities held by
them and the intended method of disposition of such securities as
shall be reasonably required to effect the registration of its
Registrable Securities, then no Registrable Securities of such
Holder shall be included in such registration.
(c) The Company shall have no
obligation with respect to any registration requested pursuant to
Section 2.2 if, due to the operation of Section 2.2(b),
the anticipated aggregate offering price of the Registrable
Securities to be included in the registration does not equal or
exceed the anticipated aggregate offering price required to
originally trigger the Company’s obligation to initiate such
registration as specified in Section 2.2; provided,
however, that if the Company exercises its rights under this
Section 2.9(c), (i) it shall be required to pay the
Registration Expenses of such withdrawn offering, and (ii) the
Holders shall not be deemed to have forfeited their right to a
demand registration under Section 2.
2.10 Indemnification.
In the event that any Registrable
Securities are included in a registration statement under
Sections 2.2, 2.3 or 2.4 above:
(a) To the extent permitted by law,
the Company will indemnify and hold harmless and hereby does
indemnify and hold harmless each Holder and Founder, the advisors,
agents, partners, officers and directors of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Exchange Act
(collectively, the “Holder Indemnified Parties”),
against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following
statements, omissions or violations (each a
“Violation”) by the Company: (i) any untrue
statement or alleged untrue statement of a material fact contained
in any registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law in connection with the
offering covered by such registration statement. The Company will
pay as incurred the Holder Indemnified Parties 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 agreement
contained in this Section 2.10(a) shall
15
not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the written consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable
to a particul
