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Exhibit 10.1
SOURCEFIRE, INC.
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS
AGREEMENT
This Fourth Amended and Restated
Investor Rights Agreement (this " Agreement "), dated
as of May 24, 2006, is entered into by and among Sourcefire, Inc.,
a Delaware corporation (the " Company "), the
individuals and entities listed on Exhibit A
attached hereto (the " Series A Purchasers ",
the " Series B Purchasers " and the "
Series C Purchasers "), and the individuals and
entities listed on Exhibit B attached hereto
(the " Series D Purchasers " and together with
the Series A Purchasers, the Series B Purchasers and the
Series C Purchasers, the " Purchasers ").
Recitals
WHEREAS, the Series D
Purchasers are purchasing shares of the Company’s
Series D Convertible Preferred Stock, par value $0.001 per
share (the " Series D Preferred Stock "),
pursuant to that certain Series D Convertible Preferred Stock
Purchase Agreement, dated as of the date hereof, by and among the
Company and the parties identified therein (the " Purchase
Agreement ");
WHEREAS, the obligations in the
Purchase Agreement are conditioned upon the execution and delivery
of this Agreement;
WHEREAS, the Series A
Purchasers are holders of the Company’s Series A
Convertible Preferred Stock, par value $0.001 per share (the "
Series A Preferred Stock "), the Series B
Purchasers are holders of the Company’s Series B
Convertible Preferred Stock, par value $0.001 per share (the "
Series B Preferred Stock "), the Series C
Purchasers are holders of the Company’s Series C
Convertible Preferred Stock, par value $0.001 per share (the "
Series C Preferred Stock " and together with the
Series A Preferred Stock, the Series B Preferred Stock
and the Series D Preferred Stock, the " Preferred
Stock ");
WHEREAS, the Company and the
Series A Purchasers, Series B Purchasers and
Series C Purchasers are parties to the Third Amended and
Restated Investor Rights Agreement dated as of January 15,
2004 (the " Prior Agreement ");
WHEREAS, the Prior Agreement can
be amended with the written consent of (i) the Company, (ii)
those Series A Purchasers holding Series A Preferred
Stock representing at least two-thirds (2/3) of the outstanding
shares of Series A Preferred Stock then held by the
Series A Purchasers, (iii) those Series B Purchasers
holding Series B Preferred Stock representing at least sixty
percent (60%) of the outstanding shares of Series B Preferred
Stock then held by the Series B Purchasers, and
(iv) those Series C Purchasers holding Series C
Preferred Stock representing at least a majority of the outstanding
shares of Series C Preferred Stock then held by the
Series C Purchasers; and
WHEREAS, the parties to the Prior
Agreement desire to amend and restate the Prior Agreement in its
entirety and, together with the other parties hereto, desire to
enter into this
Agreement in order to effect such amendment and restatement of
the Prior Agreement and to grant certain registration and
information rights to the Purchasers.
NOW, THEREFORE, in consideration
of the mutual promises and covenants contained in this Agreement,
the parties hereto agree as follows:
1. Certain
Definitions .
As used in this Agreement, the
following terms shall have the following respective meanings:
"
Available Undersubscription Amount " means the
difference between the total of all of the Basic Amounts available
for purchase by Purchasers pursuant to Section 3.1 and the
Basic Amounts subscribed for pursuant to Section 3.1.
"
Basic Amount " means, with respect to a Purchaser,
its pro rata portion of the Offered Securities determined by
dividing the aggregate number of shares of Common Stock issued or
issuable upon conversion of the Preferred Stock then held by such
Purchaser by the total number of shares of Common Stock
then-outstanding and issuable upon conversion of the Preferred
Stock then held by all of the Purchasers; provided, however,
that DBED’s Basic Amount shall include that additional
portion of Offered Securities as if DBED purchased its pro rata
share of (i) the Series B Preferred Stock purchased by
all of the Series A Purchasers pursuant to the Series B
Convertible Preferred Stock Purchase Agreement dated
February 10, 2003 (i.e., 244,643 shares of Series B
Preferred Stock), (ii) the Series C Preferred Stock
purchased by all of the Series A Purchasers and Series B
Purchasers pursuant to the Series C Convertible Preferred
Stock Purchase Agreement dated January 15, 2004 (i.e. 184,694
shares of Series C Preferred Stock), and (iii) the
Series D Preferred Stock purchased by all of the Series A
Purchasers, Series B Purchasers and Series C Purchasers
pursuant to the Purchase Agreement and the Basic Amount of the
other Purchasers shall be reduced on a pro rata basis; provided,
further, however, that for purposes of determining the pro rata
portion of Core Capital Partners, L.P. and Minotaur Funds, LLC, the
shares of Common Stock issued or issuable upon conversion of the
Preferred Stock then held by Core Capital Partners, L.P. and
Minotaur Funds, LLC shall be aggregated and Core Capital Partners,
L.P. and the Minotaur Funds, LLC (either individually or together)
shall have the right to repurchase all or part of such aggregate
pro rata portion.
"
Code " means the Internal Revenue Code of 1986, as
amended.
"
Commission " means the Securities and Exchange
Commission, or any other federal agency at the time administering
the Securities Act.
"
Common Stock " means the common stock, $0.001 par
value per share, of the Company.
"
Company " has the meaning ascribed to it in the
introductory paragraph hereto.
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"
Company Sale " means an Acquisition (as defined in
the Certificate of Incorporation of the Company in effect on the
date hereof (the " Charter ")) or an Asset Transfer
(as defined in the Charter).
"
Company Subsidiary " means any corporation,
partnership, trust, limited liability company or other
non-corporate business enterprise in which the Company (or another
Company Subsidiary) holds stock or other ownership interests
representing (a) more that fifty percent (50%) of the voting
power of all outstanding stock or ownership interests of such
entity or (b) the right to receive more than fifty percent
(50%) of the net assets of such entity available for distribution
to the holders of outstanding stock or ownership interests upon a
liquidation or dissolution of such entity.
"
Confidential Information " means any information that
is labeled as confidential, proprietary or secret, or which
otherwise should be reasonably understood by the recipient because
of the circumstances of disclosure or the nature of the information
itself, which a Purchaser obtains from the Company pursuant to
financial statements, reports and other materials provided by the
Company to such Purchaser pursuant to this Agreement or pursuant to
visitation or inspection rights granted hereunder.
"
DBED " means the Maryland Department of Business and
Economic Development.
"
Exchange Act " means the Securities Exchange Act of
1934, as amended, or any successor federal statute, and the rules
and regulations of the Commission issued under such act, as they
each may, from time to time, be in effect.
"
Indemnified Party " means a party entitled to
indemnification pursuant to Section 2.5.
"
Indemnifying Party " means a party obligated to
provide indemnification pursuant to Section 2.5.
"
Initiating Holders " means the Purchasers initiating
a request for registration pursuant to Section 2.1(a) or
2.1(b), as the case may be.
"
Major Purchaser " means DBED, Meritech and any
Purchaser that holds at least five percent (5%) of the Common Stock
issued or issuable upon the conversion of all the Preferred
Stock.
"
Meritech " means Meritech Capital Partners III L.P.,
Meritech Capital Affiliates III L.P. and their respective
affiliates.
"
Notice of Acceptance " means a written notice from a
Purchaser to the Company containing the information specified in
Section 3.1(b).
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"
Offer " means a written notice of any proposed or
intended issuance, sale or exchange of Offered Securities
containing the information specified in Section 3.1(a).
"
Offered Securities " means (i) any shares of
Common Stock, (ii) any other equity securities of the Company,
including, without limitation, shares of preferred stock,
(iii) any option, warrant or other right to subscribe for,
purchase or otherwise acquire any equity securities of the Company,
or (iv) any debt securities convertible into capital stock of
the Company.
"
Other Holders " means holders of securities of the
Company (other than Purchasers) who are entitled, by contract with
the Company, to have securities included in a Registration
Statement.
"
Preferred Stock " has the meaning ascribed to it in
the recitals hereto.
"
Prospectus " means the prospectus included in any
Registration Statement, as amended or supplemented by an amendment
or prospectus supplement, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated
by reference in such Prospectus.
"
Purchase Agreement " has the meaning ascribed to it
in the recitals hereto.
"
Purchaser " has the meaning ascribed to it in the
introductory paragraph hereto.
"
Qualifying Public Offering " has the meaning ascribed
to it in the Charter.
"
Refused Securities " means those Offered Securities
as to which a Notice of Acceptance has not been given to the
Company by the Purchasers pursuant to Section 3.1.
"
Registration Statement " means a registration
statement filed by the Company with the Commission for a public
offering and sale of securities of the Company under the Securities
Act (other than a registration statement relating to an employee
benefit plan or any corporate reorganization or other transaction
under Rule 145, such as a registration statement on Form S-8
or Form S-4, or their successors forms, or any other form for a
similar limited purpose).
"
Registration Expenses " means all expenses (other
than underwriting discounts and commissions and transfer taxes)
incurred by the Company in complying with the provisions of
Section 2, including, without limitation, all registration and
filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Company and the fees and expenses of
one counsel selected by the holders of a majority of the
Registrable Shares held by the Selling Stockholders to represent
the Selling Stockholders in connection with such registration,
state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but
excluding underwriting discounts, selling commissions and the fees
and expenses of Selling Stockholders’ own counsel (other than
the counsel selected to represent all Selling Stockholders).
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"
Registrable Shares " means (a) the shares of
Common Stock issued or issuable upon conversion of the Preferred
Stock, (b) the shares of Common Stock issued or issuable upon
the conversion or exercise of any other convertible securities or
warrants acquired by the holders of the Preferred Stock,
(c) any other shares of Common Stock issued as a dividend or
other distribution with respect to, or in exchange for, or in
replacement of, such shares, and (d) any shares of Common
Stock or Preferred Stock acquired pursuant to that certain Fourth
Amended and Restated Right of First Refusal and Co-Sale Agreement,
dated as of the date of this Agreement, by and among the Company,
the Purchasers, and the Key Holders (all as defined therein) (the "
Co-Sale Agreement "); provided ,
however , that shares of Common Stock which are Registrable
Shares shall cease to be Registrable Shares upon five
(5) years after the closing of the Qualifying Public Offering
or, with respect to any holder, at such time that such holder is
able to sell all its shares of Common Stock pursuant to
Rule 144(k). Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall
include shares of Common Stock issuable upon conversion of the
Preferred Stock even if such conversion has not been effected.
"
Securities Act " means the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations of the Commission issued under such act, as they each
may, from time to time, be in effect.
"
Selling Stockholder " means any person owning of
record Registrable Shares to be included in a Registration
Statement.
"
Undersubscription Amount " means, with respect to a
Purchaser, any additional portion of the Offered Securities
attributable to the Basic Amounts of other Purchasers as such
Purchaser indicates it will purchase or acquire should the other
Purchasers subscribe for less than their Basic Amounts.
2. Registration
Rights .
2.1
Required Registrations .
(a) At
any time after the earlier of (i) the fourth (4
th ) anniversary of
the date of this Agreement or (ii) six (6) months after
the closing of the Qualifying Public Offering, a Purchaser or
Purchasers holding in the aggregate at least twenty percent (20%)
of the Registrable Shares may together request, in writing, that
the Company effect the registration on Form S-1 (or any successor
form) of Registrable Shares having an aggregate anticipated
offering price, net of underwriting discounts and commissions, of
at least $5,000,000 (based on the market price or fair value on the
date of such request). The Company shall not be required to effect
more than two (2) registrations (that have been declared and
ordered effective by the Commission) pursuant to this
Section 2.1(a).
(b) At
any time after the Company becomes eligible to file a Registration
Statement on Form S-3 (or any successor form relating to secondary
offerings), a Purchaser or Purchasers holding at least ten percent
(10%) of the Registrable Shares may request, in writing, that the
Company effect the registration on Form S-3 (or such successor
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form) of Registrable Shares having an aggregate anticipated
offering price of at least $2,000,000. The Company shall not be
required to effect more than two (2) registrations in any
twelve (12) month period pursuant to this
Section 2.1(b).
(c) Upon
receipt of any request for registration pursuant to this
Section 2.1, the Company shall promptly give written notice of
such proposed registration to all Purchasers other than the
Initiating Holders. Such Purchasers shall have the right, by giving
written notice to the Company within thirty (30) days after
the Company provides its notice, to elect to have included in such
registration such of their Registrable Shares as such Purchasers
may request in such notice of election, subject in the case of an
underwritten offering to the terms of Section 2.1(d).
Thereupon, the Company shall, as expeditiously as possible, use its
best efforts to effect the registration on an appropriate
registration form of all Registrable Shares which the Company has
been requested to so register; provided , however ,
that in the case of a registration requested under
Section 2.1(b), the Company will only be obligated to effect
such registration on Form S-3 (or any successor form).
(d) If
the Initiating Holders intend to distribute the Registrable Shares
covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to
Section 2.1(a) or (b), as the case may be, and the Company
shall include such information in its written notice referred to in
Section 2.1(c). In such event, the right of any other
Purchaser to include its Registrable Shares in such registration
pursuant to Section 2.1(a) or (b), as the case may be, shall
be conditioned upon such other Purchaser’s participation in
such underwriting on the terms set forth herein. All Purchasers
including Registrable Shares in such registration shall enter into
an underwriting agreement upon customary terms with the underwriter
or underwriters selected for such underwriting by the Company and
approved by a majority of the Initiating Holders, which such
approval will not be unreasonably withheld, conditioned, or
delayed; provided that such underwriting agreement shall not
provide for indemnification or contribution obligations on the part
of the Purchasers materially greater than the obligations of the
Purchasers pursuant to Section 2.5. If any Purchaser who has
requested inclusion of its Registrable Shares in such registration
as provided above disapproves of the terms of the underwriting,
such Purchaser may elect, by written notice to the Company, to
withdraw its Registrable Shares from such Registration Statement
and underwriting. If the managing underwriter advises the Company
in writing that marketing factors require a limitation on the
number of shares to be underwritten, the number of Registrable
Shares to be included in the Registration Statement and
underwriting shall be allocated among all Purchasers requesting
registration in proportion, as nearly as practicable, to the
respective number of Registrable Shares held by them on the date of
the request for registration made by the Initiating Holders
pursuant to Section 2.1(a) or (b), as the case may be;
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. If
any Purchaser would thus be entitled to include more Registrable
Shares than such Purchaser requested to be registered, the excess
shall be allocated among other requesting Purchasers pro rata in
the manner described in the preceding sentence.
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(e) The
Company shall not be required to effect any registration within six
(6) months after the effective date of the Registration
Statement relating to the Qualifying Public Offering. For purposes
of this Section 2.1(e), a Registration Statement shall not be
counted if, as a result of an exercise of the underwriter’s
cut-back provisions, less than thirty-five percent (35%) of the
total number of Registrable Shares that Purchasers have requested
to be included in such Registration Statement are so included.
(f) If
at the time of any request to register Registrable Shares by
Initiating Holders pursuant to this Section 2.1, the Company
is engaged or has plans to engage in a registered public offering
or is engaged in any other activity which, in the good faith
determination of the Company’s Board of Directors, would be
adversely affected by the requested registration, then the Company
may at its option direct that such request be delayed for a period
not in excess of ninety (90) days from the date of such
request, such right to delay a request to be exercised by the
Company not more than twice in any twelve (12) month
period.
2.2
Incidental Registration .
(a) Whenever
the Company proposes to file a Registration Statement (other than a
Registration Statement filed pursuant to Section 2.1 or filed
as part of the Company’s initial public offering) at any time
and from time to time, it will, prior to such filing, give written
notice to all Purchasers of its intention to do so. Upon the
written request of a Purchaser or Purchasers given within fifteen
(15) days after the Company provides such notice (which
request shall state the intended method of disposition of such
Registrable Shares), the Company shall use its best efforts to
cause all Registrable Shares which the Company has been requested
by such Purchaser or Purchasers to register to be registered under
the Securities Act to the extent necessary to permit their sale or
other disposition in accordance with the intended methods of
distribution specified in the request of such Purchaser or
Purchasers; provided that the Company shall have the right
to postpone or withdraw any registration effected pursuant to this
Section 2.2 without obligation to any Purchaser.
(b) If
the registration for which the Company gives notice pursuant to
Section 2.2(a) is a registered public offering involving an
underwriting, the Company shall so advise the Purchasers as a part
of the written notice given pursuant to Section 2.2(a). In
such event, the right of any Purchaser to include its Registrable
Shares in such registration pursuant to this Section 2.2 shall
be conditioned upon such Purchaser’s participation in such
underwriting on the terms set forth herein. All Purchasers
including Registrable Shares in such registration shall enter into
an underwriting agreement upon customary terms with the underwriter
or underwriters selected for the underwriting by the Company;
provided that such underwriting agreement shall not provide
for indemnification or contribution obligations on the part of
Purchasers materially greater than the obligations of the
Purchasers pursuant to Section 2.5. If any Purchaser who has
requested inclusion of its Registrable Shares in such registration
as provided above disapproves of the terms of the underwriting,
such Purchaser may elect, by written notice to the Company
delivered at least ten (10) business days prior to the
effective date of the registration statement, to withdraw its
shares from such Registration Statement and underwriting without
loss of any future registration rights. If the managing underwriter
advises the Company in writing that
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marketing factors require a limitation on the number of shares
to be underwritten, the number of shares that may be included in
the underwriting shall be allocated, first, to the Company, and
second, to the Selling Stockholders in proportion, as nearly as
practicable, to the respective number of Registrable Shares held by
them on the date the Company gives the notice specified in
Section 2.2(a); provided , however , that the
number of Registrable Shares permitted to be included in such
registration shall in any event be at least twenty-five percent
(25%) of the aggregate number of shares included in such
registration, unless such registration is the initial public
offering. No Registrable Shares shall be excluded from such
offering unless all other shares (other than those to be sold for
the account of the Company) are first excluded.
2.3
Registration Procedures .
(a) If
and whenever the Company is required by the provisions of this
Agreement to use its best efforts to effect the registration of any
Registrable Shares under the Securities Act, the Company shall
promptly:
(i) file
with the Commission a Registration Statement with respect to such
Registrable Shares and use its best efforts to cause that
Registration Statement to become effective;
(ii) prepare
and file with the Commission any amendments and supplements to the
Registration Statement and the prospectus included in the
Registration Statement as may be necessary to comply with the
provisions of the Securities Act (including the anti-fraud
provisions thereof) and to keep the Registration Statement
effective for thirty (30) days from the effective date or such
lesser period until all such Registrable Shares are sold, provided
that a Registration Statement on a Form S-3 which will remain
effective for twelve (12) months from the effective date or
such lesser period until all such Registrable Shares are sold;
(iii) furnish
to each Selling Stockholder such reasonable numbers of copies of
the Prospectus, including any preliminary Prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as such Selling Stockholders may reasonably request in
order to facilitate the public sale or other disposition of the
Registrable Shares owned by such Selling Stockholder;
(iv) register
or qualify the Registrable Shares covered by the Registration
Statement under the securities or Blue Sky laws of such states as
the Selling Stockholders shall reasonably request, and do any and
all other acts and things that may be necessary or desirable to
enable the Selling Stockholders to consummate the public sale or
other disposition in such states of the Registrable Shares owned by
the Selling Stockholders; provided , however , that
the Company shall not be required in connection with this paragraph
(iv) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;
(v) cause
all such Registrable Shares to be listed on each securities
exchange or automated quotation system on which similar securities
issued by the Company are then listed;
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(vi) provide
a transfer agent and registrar for all such Registrable Shares not
later than the effective date of such registration statement;
(vii) make
available for inspection by the Selling Stockholders, any managing
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant or other
agent retained by any such underwriter or selected by the Selling
Stockholders, all financial and other records, pertinent corporate
documents and properties of the Company and cause the
Company’s officers, directors, employees and independent
accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(viii) notify
each Selling Stockholder, promptly after it shall receive notice
thereof, of the time when such Registration Statement has become
effective or a supplement to any Prospectus forming a part of such
Registration Statement has been filed; and
(ix) following
the effectiveness of such Registration Statement, notify each
seller of such Registrable Shares of any request by the Commission
for the amending or supplementing of such Registration Statement or
Prospectus.
(b) If
the Company has delivered a Prospectus to the Selling Stockholders
and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly
notify the Selling Stockholders and, if requested, the Selling
Stockholders shall immediately cease making offers of Registrable
Shares and return all Prospectuses to the Company. The Company
shall promptly provide the Selling Stockholders with revised
Prospectuses and, following receipt of the revised Prospectuses,
the Selling Stockholders shall be free to resume making offers of
the Registrable Shares.
(c) In
the event that, in the judgment of the Company, it is advisable to
suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not
yet been publicly disclosed and as to which the Company believes
public disclosure would be detrimental to the Company, the Company
shall notify all Selling Stockholders to such effect, and, upon
receipt of such notice, each such Selling Stockholder shall
immediately discontinue any sales of Registrable Shares pursuant to
such Registration Statement until such Selling Stockholder has
received copies of a supplemented or amended Prospectus or until
such Selling Stockholder is advised in writing by the Company that
the then current Prospectus may be used and has received copies of
any additional or supplemental filings that are incorporated or
deemed incorporated by reference in such Prospectus.
Notwithstanding anything to the contrary herein, the Company shall
not exercise its rights under this Section 2.3(c) to suspend
sales of Registrable Shares for a period in excess of thirty
(30) days consecutively or sixty (60) days in any three
hundred sixty-five (365) day period as long as such suspension
would not be in violation of the Securities Act.
2.4
Allocation of Expenses . The Company will pay all
Registration Expenses for all registrations under this Agreement;
provided , however , that if a registration under
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Section 2.1(a) or Section 2.1(b) is withdrawn at the
request of the Initiating Holders (other than as a result of
material adverse information concerning the business or financial
condition of the Company which is made known to the Selling
Stockholders after the date on which such registration was
requested) and if the Initiating Holders elect not to have such
registration counted as a registration requested under
Section 2.1(a) or Section 2.1(b), as applicable, the
Selling Stockholders shall pay the Registration Expenses of such
registration pro rata in accordance with the number of their
Registrable Shares included in such registration.
2.5
Indemnification and Contribution .
(a) In
the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company
will indemnify and hold harmless each Selling Stockholder, each
underwriter of such Registrable Shares, and each other person, if
any, who controls such Selling Stockholder or underwriter within
the meaning of the Securities Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which
such Selling Stockholder, underwriter or controlling person may
become subject under the Securities Act, the Exchange Act, state
securities or Blue Sky laws, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any
Registration Statement under which such Registrable Shares were
registered under the Securities Act, any Prospectus or any
amendment or supplement to such Registration Statement,
(ii) the omission or alleged omission to state 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 Registration Statement or the offering
contemplated thereby; and the Company will reimburse such Selling
Stockholder, underwriter and each such controlling person for any
legal or any other expenses reasonably incurred by such Selling
Stockholder, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided , however , that the Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any
untrue statement or omission made in such Registration Statement,
Prospectus or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in
writing, by or on behalf of such Selling Stockholder, underwriter
or controlling person specifically for use in the preparation
thereof.
(b) In
the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each Selling
Stockholder, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors and officers and each
underwriter (if any) and each person, if any, who controls the
Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company,
such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue
10
statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any
Prospectus, or any amendment or supplement to the Registration
Statement or (ii) any omission or alleged omission to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, if and to the extent (and
only to the extent) that the statement or omission was made in
reliance upon and in conformity with information relating to such
Selling Stockholder furnished in writing to the Company by such
Selling Stockholder specifically for use in connection with the
preparation of such Registration Statement, prospectus, amendment
or supplement; provided , however , that the
obligations of a Selling Stockholder hereunder shall be limited to
an amount equal to the net proceeds to such Selling Stockholder of
Registrable Shares sold in connection with such registration.
(c) Each
Indemnified Party shall give notice to the Indemnifying Party
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided , that counsel for
the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld, conditioned or
delayed); and, provided , further , that the failure
of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this
Section 2.5 except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may
participate in such defense at such party’s expense;
provided , however , that the Indemnifying Party
shall pay the reasonable expenses of the Indemnified Party if the
Indemnified Party reasonably concludes that representation of such
Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party
represented by such counsel in such proceeding; and provided
, further , that in no event shall the Indemnifying Party be
required to pay the expenses of more than one counsel for the
Indemnified Party. The Indemnifying Party also shall be responsible
for the expenses of such defense if the Indemnifying Party does not
elect to assume such defense. No Indemnifying Party, in the defense
of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified
Party of a release from all liability in respect of such claim or
litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior
written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld, conditioned or delayed.
(d) In
order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this
Section 2.5 is due in accordance with its terms but for any
reason is held to be unavailable to an Indemnified Party in respect
to any losses, claims, damages and liabilities referred to herein,
then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or
liabilities to which such party may be subject in such proportion
as is appropriate to reflect the relative fault of the Indemnified
Party on the one hand and the Indemnifying Party on the other in
connection with the statements
11
or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The relative fault of the Indemnified Party and the
Indemnifying Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material
fact related to information supplied by the Indemnified Party or
the Indemnifying Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Selling
Stockholders agree that it would not be just and equitable if
contribution pursuant to this Section 2.5(d) were determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this Section 2.5(d),
(i) in no case shall any one Selling Stockholder be liable or
responsible for any amount in excess of the net proceeds received
by such Selling Stockholder from the offering of Registrable Shares
and (ii) the Company shall be liable and responsible for any
amount in excess of such proceeds; provided , however
, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a
claim for contribution may be made against anoth
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