EXHIBIT 10.6
GIGA INFORMATION GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
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NOVEMBER 13, 1995
TABLE OF CONTENTS
PAGE
Section 1. Amendment .............................................. 1
1.1 Amendment and Waiver.................................. 1
Section 2. Registration Rights .................................... 2
2.1 Definitions........................................... 2
2.2 Requested Registration................................ 3
2.3 Company Registration.................................. 5
2.4 Obligations of the Company............................ 5
2.5 Furnish Information................................... 6
2.6 Expenses of Demand Registration....................... 6
2.7 Expenses of Company Registration...................... 7
2.8 Underwriting Requirements............................. 7
2.9 Delay of Registration................................. 8
2.10 Indemnification....................................... 8
2.11 Reports Under Securities Exchange Act of 1934......... 10
2.12 Form S-3 Registration................................. 10
2.13 Assignment of Registration Rights..................... 11
2.14 "Market Stand-Off" Agreement.......................... 12
2.15 Termination of Registration Rights.................... 12
Section 3. Miscellaneous .......................................... 12
3.1 Assignment............................................ 12
3.2 Third Parties......................................... 12
3.3 Governing Law......................................... 12
3.4 Counterparts.......................................... 13
3.5 Notices............................................... 13
3.6 Severability.......................................... 13
3.7 Rights of Holders..................................... 13
3.8 Delays or Omissions................................... 13
3.9 Attorney's Fees....................................... 13
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REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as of
the 9th day of November, 1995, by and among Giga Information Group, Inc., a
Delaware corporation (the "Company"), the investors listed on Exhibit A hereto
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(collectively, the "Investors") and those key members of the Company's
management listed on Exhibit B hereto as may be designated from time to time by
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the Board of Directors (collectively, the "Management Persons").
RECITALS
WHEREAS, as of the date hereof each of the Investors is acquiring the
number of shares of the classes and series of the Company's capital stock set
forth opposite its name on Exhibit A hereto;
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WHEREAS, as of the date hereof each of the Management Persons owns the
number of shares of the classes and series of the Company's capital stock set
forth opposite his or her name on Exhibit B hereto (which, collectively with any
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additional shares of the Company's securities acquired by the Management Persons
after the date of this Agreement, shall be deemed to be "Management Shares");
WHEREAS, the execution of this Agreement is a condition precedent to
the consummation of the transactions contemplated by the Series B Preferred
Stock Purchase Agreement dated as of November 13, 1995 among the Company and the
Investors (the "Series B Purchase Agreement");
NOW, THEREFORE, the parties agree as follows:
Section 1. Amendment.
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1.1 Amendment and Waiver. Except as expressly provided herein,
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neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that any provisions hereof may be amended, waived, discharged
or terminated upon the written consent of all of (i) the Company, (ii) the
Holders of at least a majority of the Registrable Securities, excluding the then
outstanding Management Shares; and (iii) the Holders of at least a majority of
the then outstanding Management Shares; provided further that the inclusion of
additional purchasers of the Company's Common Stock, as agreed from time to time
by the Company's Board of Directors, as "Management Persons" hereunder shall not
be deemed an amendment to this Agreement. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each Holder of Registrable
Securities, and the Company.
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Section 2. Registration Rights.
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2.1 Definitions. As used in this Agreement:
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(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Securities Act")
and the subsequent declaration or ordering of the effectiveness of such
registration statement.
(b) The term "Registrable Securities" means:
(i) Management Shares, except for purposes of the registration rights
set forth under Sections 2.2 and 2.12 to which the Management Persons shall not
be entitled under this Agreement, except that the Management Persons may request
the inclusion of the Management Shares held by them upon receipt of the notice
from the Company to all Holders as specified in Section 2.2(a);
(ii) the shares of Common Stock issuable or issued upon conversion of
the Company's Series B Preferred Stock (the shares of Common Stock referred to
in clauses (i) and (ii) hereof are collectively referred to hereafter as the
"Stock"); and
(iii) any other shares of Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Stock, excluding in all cases, however,
any Registrable Securities sold by a person in a transaction in which his or her
rights under this Agreement are not assigned;
provided, however, that:
(i) Common Stock or other securities shall only be treated as
Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, (B) sold in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act so that all transfer
restrictions, and restrictive legends with respect thereto, if any, are removed
upon the consummation of such sale, or (C) sold, assigned or otherwise
transferred in a transaction in which the rights under this Section 2 have not
been assigned in accordance with Section 2.13; and
(ii) if the Company shall have consummated a Qualified Public
Offering, Common Stock that is eligible to be sold pursuant to Rule 144(b)
promulgated under the Securities Act (or any successor rule).
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(c) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of Common Stock outstanding which
are, and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities which are, Registrable Securities.
(d) The term "Holder" means any person owning of record Registrable
Securities who acquired such Registrable Securities in a transaction or series
of transactions not involving any registered public offering or pursuant to Rule
144.
(e) The term "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the Securities and Exchange Commission ("SEC") which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
(f) The term "Qualified Public Offering" means an underwritten initial
public offering pursuant to a registration statement (other than a registration
statement relating either to the sale of securities to employees of the Company
pursuant to a stock option, stock purchase or similar plan or a transaction
pursuant to Rule 145 under the Securities Act) under the Securities Act covering
the Company's Common Stock, which results in aggregate cash proceeds (prior to
underwriters' commissions and expenses) to the Company and any selling
stockholder of at least $15,000,000, and which has a public offering price of
not less than $5.25 per share (as appropriately adjusted for stock splits,
combinations, reclassifications and the like).
(g) Capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned to them in the Series B Purchase Agreement.
2.2 Requested Registration.
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(a) If the Company shall receive at any time after the earlier of (i)
November 1, 1999, or (ii) six (6) months after the effective date of the first
registration statement for a Qualified Public Offering, a written request from
the Holders of at least forty percent (40%) of the Registrable Securities then
outstanding (excluding the Management Shares, for which the Management Persons
shall not be entitled to initiate a request under this Section 2.2(a)), that the
Company file a registration statement under the Securities Act covering the
registration of at least twenty percent (20%) of the Registrable Securities then
outstanding (excluding the Management Shares), and for which the anticipated
aggregate gross proceeds to the Company and any selling stockholder would exceed
$5,000,000, then the Company shall, within ten (10) days of the receipt thereof,
give written notice of such request to all Holders (including Management
Persons, who shall be entitled to request registration of the Management Shares
held by them pursuant to this sentence) and shall, subject to the limitations of
subsection 2.2(b), effect as soon as practicable, and in any event within ninety
(90) days
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of the receipt of such request, the registration under the Securities Act of all
Registrable Securities which the Holders request to be registered within twenty
(20) days of the mailing of such notice by the Company in accordance with
Section 3.5.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") 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 subsection
2.2(a). The underwriter will be selected by the Company and shall be reasonably
acceptable to a majority in interest of the Initiating Holders. In such event,
the right of any Holder to include his 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 proposing to distribute
their securities through such underwriting shall (together with the Company as
provided in subsection 2.4(e)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Section 2.2, if the underwriter
advises the Company in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the Company shall so advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting that are held by Holders other than the Management Persons shall
not be reduced unless all Management Shares are first entirely excluded from the
underwriting; provided, further, that the number of shares of Registrable
Securities (including Management Shares) to be included in such underwriting
shall not be reduced unless all other securities proposed to be sold by persons
other than the Holders (including the Management Persons) and the Company are
first entirely excluded from the underwriting.
(c) The Company is obligated to effect only two (2) such registrations
pursuant to this Section 2.2 and, in any event, no more than one (1) such
registration in any twelve (12) month period.
(d) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 2.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company for such registration statement to be filed and it is
therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of the Initiating
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Holders; provided, however, that the Company may not utilize this right more
than twice in any twelve month period nor for a total of more than 120
consecutive days.
2.3 Company Registration. If the Company proposes to register
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(including for this purpose a registration effected by the Company for
stockholders other than the Holders) any of its Common Stock or other securities
under the Securities Act in connection with the public offering of such
securities solely for cash (other than a registration relating either to the
sale of securities to participants in a Company stock option, stock purchase or
similar plan or in an SEC Rule 145 transaction, or a registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the Company in
accordance with Section 3.5, the Company shall, subject to the provisions of
Section 2.8, cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered.
2.4 Obligations of the Company. Whenever required under this Section
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2 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 until the distribution contemplated in the
Registration Statement has been completed (but not for more than 270 days).
(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.
(c) Furnish to the Holders such numbers 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 that the Company shall not be required in connection therewith or as a
condition thereto to
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qualify to do business or, except as required under the Securities Act, to file
a general consent to service of process in any such states or jurisdictions.
(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 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 of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act 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.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 2, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 2, if such securities are being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated 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, addressed to the underwriters, and (ii) a letter dated 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.
(h) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or automated quotation system
on which similar securities issued by the Company are then listed.
2.5 Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Section 2 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
2.6 Expenses of Demand Registration. All expenses other than
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underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 2.2, including
(without limitation), all registration, filing and qualification fees, printers
and accounting fees, fees and
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disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 2.2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
Participating Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 2.2.
2.7 Expenses of Company Registration. The Company shall bear and pay
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all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 2.3 for each Holder (which right may be assigned as provided
in Section 2.13), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
2.8 Underwriting Requirements. In connection with any offering
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involving an underwriting of shares being issued by the Company, the Company
shall not be required under Section 2.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it, and then
only in such quantity as will not, in the written opinion of the underwriters,
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters reasonably believe is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the offering
(the securities so included to be apportioned pro rata among the selling
stockholders according to the total amount of securities entitled to be included
therein owned by each selling stockholder or in such other proportions as shall
mutually be agreed to by such selling stockholders, provided that (i) if the
number of shares of Registrable Securities to be included in any such offering
shall be reduced, such reduction shall first be made by a reduction of the
number of Management Shares to be so sold; (ii) the number of shares of
Registrable Securities included in any such offering shall not be so reduced
unless all other securities proposed to be sold by persons other than (A) the
Holders (including the Management Persons), (B) the Company, and (C) Pari Passu
Holders (as defined below) are first entirely excluded from the underwriting.
For purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder which is a holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners and stockholders of
such holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing
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persons shall be deemed to be a single "selling stockholder," and any pro rata
reduction with respect to such "selling stockholder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "selling stockholder," as defined in this
sentence. "Pari Passu Holders" means persons who are contractually entitled to
inclusion in the offering, on a pari passu basis with the Holders, of shares of
Common Stock issued or issuable to such persons, which shares will be subject to
reduction of the number to be included in the registration on a pro rata basis
with the Registrable Securities held by the Investors; provided that the Company
may not grant such rights to Pari Passu Holders with respect to an aggregate of
more than 50% of the number of Registrable Securities (excluding Management
Shares) issued or issuable upon conversion of the aggregate number of Shares of
the Company's Series B Preferred Stock issued pursuant to the Series B Purchase
Agreement without the written consent of the Holders of at least a majority of
the Registrable Securities (excluding Management Shares).
2.9 Delay of Registration. No Holder shall have any right to obtain
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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.
2.10 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 2:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless 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 Securities Exchange Act of 1934,
as amended (the "1934 Act"), against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the 1934 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
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such 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 1934 Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law; and the Company will pay as incurred
to each such Holder, underwriter or controlling person, 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 subsection 2.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the
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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 a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Securities Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 2.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 2.10(b) 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 Holder, which consent shall not be unreasonably
withheld; provided that in no event shall any indemnity under this subsection
2.10(b) exceed the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.10 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.10, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, only if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.10, but the omission
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so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 2.10.
(d) The obligations of the Company and Holders under this Section 2.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 2, and otherwise.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
2.11 Reports Under Securities Exchange Act of 1934. With a view to
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making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company), the Securities Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
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2.12 Form S-3 Registration. In case the Company shall receive from
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any Holder or Holders owning in the aggregate at least 20% of the Registrable
Securities a written request or requests that the Company effect a registration
on Form S-3 and any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by such Holder or Holders, the Company
will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holder's or Holders' Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within 20 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 2.12, (1) if Form S-3 is not available for
such offering by the Holders; (2) if the Holders, 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 (net of any underwriters' discounts or
commissions) of less than $500,000; (3) if the Company shall furnish to the
Holders a certificate signed by the president of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than sixty (60) days after receipt of the request of the
Holder or Holders under this Section 2.12; provided, however, that the Company
shall not utilize this right more than once in any twelve month period; (4) if
the Company has, within the six month period preceding the date of such request,
already effected one registration on Form S-3 for the Holders pursuant to this
Section 2.12; (5) if the Company has already effected a total of six
registrations on Form S-3 for the Holders pursuant to this Section 2.12; or (6)
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.
(c) Subject to the foregoing, the Company shall file a 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. All expenses incurred in connection with a registration
requested pursuant to Section 2.12, including (without limitation) all
registration, filing, qualification, printer's and accounting fees, auditing
expenses and the fees and disbursements of counsel for the Company shall be
borne by the Company, but excluding underwriting discounts and commissions
relating to Registrable Securities and the fees and disbursements of counsel
11
to the selling Holder or Holders. Registrations effected pursuant to this
Section 2.12 shall not be counted as demands for registration or registrations
effected pursuant to Section 2.2 or 2.3.
2.13 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of all of such Holder's
Registrable Securities or at least 400,000 shares (as adjusted to reflect stock
splits, stock dividends or recapitalizations) of such securities provided the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. The foregoing 400,000 share
limitation shall not apply, however, to transfers by a Holder to stockholders,
partners or retired partners of the Holder, or to spouses, ancestors, lineal
descendants and siblings of the Holder, if all such transferees or assignees of
a single Holder agree in writing to appoint a single representative as their
attorney in fact for the purpose of receiving any notices and exercising their
rights under this Section 2.
2.14 "Market Stand-Off" Agreement. The Holder hereby agrees that
---------------------------
during the period of duration specified by the Company and an underwriter of
Company Common Stock or other securities of the Company following the effective
date of a registration statement of the Company filed under the Securities Act,
it shall not, to the extent requested by the Company and such underwriter, sell
or otherwise transfer or dispose of (other than to donees who agree to be
similarly bound) any Common Stock of the Company held by it at any time during
such period except Common Stock included in such registration; provided,
however, that:
(a) all officers and directors of the Company and all other persons
with registration rights (whether or not pursuant to this Agreement) enter into
similar agreements; and
(b) such market stand-off period shall not exceed 180 days.
To enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of the Investor (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.
2.15 Termination of Registration Rights. No Holder shall be entitled
----------------------------------
to exercise any right provided for in this Section 2 after the later of (a)
three (3) years following the consummation of a Qualified Public Offering or (b)
such time following the Company's initial public offering as such Holder is
entitled under Rule 144 to
12
dispose of all the Registrable Securities held by such Holder during any 90-day
period.
Section 3. Miscellaneous.
-------------
3.1 Assignment. Subject to the provisions of Section 2.13 hereof,
----------
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto.
3.2 Third Parties. Nothing in this Agreement, express or implied, is
-------------
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
3.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of New York in the United States of America as
applied to agreements among New York residents entered into and to be performed
entirely within New York.
3.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.5 Notices. Any notice required or permitted by this Agreement
-------
shall be in writing and shall be sent by prepaid registered or certified mail,
return receipt requested, addressed to the other party at the address shown
below or at such other address for which such party gives notice hereunder.
Such notice shall be deemed to have been given three (3) days after deposit in
the mail.
3.6 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
3.7 Rights of Holders. Each holder of Registrable Securities shall
-----------------
have the absolute right to exercise or refrain from exercising any right or
rights that such holder may have by reason of this Agreement, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such holder shall not incur any liability to any other
holder of any securities of the Company as a result of exercising or refraining
from exercising any such right or rights.
3.8 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to any party to this Agreement, upon any breach or
default of the other party, shall impair any such right, power or remedy of such
non-breaching party nor shall it be construed to be a waiver of any such breach
or default, or an
13
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be made in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
3.9 Attorney's Fees. If any action at law or in equity is necessary
---------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the day and year first above written.
COMPANY:
GIGA INFORMATION GROUP, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title:
----------------------
MANAGEMENT PERSONS:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
(▇▇▇▇▇ ▇▇▇▇▇▇▇)
14
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
THE INVESTORS:
-------------
Name of Investor:
Neill & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------
By:/s/ Neill & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name of Investor:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------
Name of Investor:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------
By: /s/ Neill ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Father
Name of Investor:
Will ▇. ▇▇▇▇▇▇
--------------
By:/s/ Will ▇. ▇▇▇▇▇▇
------------------
Name of Investor:
▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------
15
Name of Investor:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
By:/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name of Investor:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name of Investor:
▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name of Investor:
▇▇▇▇▇▇▇ Technology Partners III
-------------------------------
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------
Title: General Partner
---------------
Name of Investor:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
16
Name of Investor:
Gilo Family Partnership
-----------------------
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
-----------
Title: President of Davidi and Shamaja
-------------------------------
Gilo Inc., General Partner
--------------------------
Name of Investor:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name of Investor:
▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name of Investor:
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇
---------------------
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇
-------------------------
17
Name of Investor:
RRE GIGA INVESTORS II, L.P.
By: RRE PARTNERS, L.L.C.,
as General Partner
------------------
By: RRE Investors, L.L.C.,
as Managing Member
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Title: Class A Member
--------------
Name of Investor:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------
Name of Investor:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name of Investor:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
18
Name of Investor:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------
Name of Investor:
21st Century Communications Partners, L.P.
By: Infomedia Associates, Ltd., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
21st Century Communications Foreign Partners, L.P.
By: Infomedia Associates, Ltd., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
21st Century T-E Partners, L.P.
By: Infomedia Associates, Ltd., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
Name of Investor:
Executive Technology L.P.
-------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: President of S/2/ Technology Corp
----------------------------------
which is the General Partner of
Executive Technology L.P.
19
Name of Investor:
Monstol Investments NV
----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
------------------------------
President S/2/ Technology Corp
Name of Investor:
Core Technology Fund Inc.
-------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
----------------------
Managing Director
Name of Investor:
Sci-Tech Investment Partners L.P.
---------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
---------------------------------
President of S/2/ Technology Corp
which is the General Partner
of SciTech Investment Ptr.
Name of Investor:
The Matrix Technology Group NV
------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
----------------------
Managing Director
20
Name of Investor:
Yale University
---------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
------------------------------
President S/2/ Technology Corp
Name of Investor:
Yale University Retirement Plan for Staff Employees
---------------------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
-------------------------------
President, S/2/ Technology Corp
Name of Investor:
SG Partners, L.P.
-----------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
---------------------------------
President of S/2/ Technology Corp
which is the General Partner
of SG Partners ▇.▇.
▇▇▇▇▇▇▇▇▇ Holdings
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Title: PRINCIPAL
--------------
▇▇▇▇▇▇▇▇▇▇ Growth Partners, L.P.
By: ▇▇▇▇▇▇▇▇▇▇ Asset Management, L.P., Its General Partner
-------------------------------------------------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Title: PRINCIPAL
--------------
▇▇▇▇▇▇▇▇▇▇ Growth Partners II, L.P.
By: /s/ ▇▇▇▇▇ High
-------------------
Title: GENERAL PARTNER
----------------
21
Nosrob Investments, Ltd.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Title: PRINCIPAL
--------------
Quota Fund, N.V.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Title: PRINCIPAL
--------------
▇▇▇▇▇▇▇▇▇▇ Small Cap Partners III, L.P.
By: /s/ ▇▇▇▇▇ High, Its General Partner
----------------
By: ▇▇▇▇▇ HIGH
------------------------------------
TITLE: GENERAL PARTNER
---------------------------------
RRE Giga Investors, L.P.
By: RRE Investors L.L.C., its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Managing Director
---------------------------------
22
Lagunitas Partners, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, its General Partner
--------------------
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ International
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇ McBaine
-------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
(▇▇▇ ▇. ▇▇▇▇▇▇)
▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
(▇. ▇▇▇▇▇▇▇▇▇ McBaine)
Kensington Partners L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, its General Partner
------------------
By: ▇▇▇▇ ▇▇▇▇
Title: G.P.
----------------------------------
Acorn Investment Trust
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
23
"Exhibit A Intentionally Omitted"
