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METAPATH SOFTWARE INTERNATIONAL, INC.
REGISTRATION RIGHTS AGREEMENT
December 4, 1998
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TABLE OF CONTENTS
Page
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1. Definitions.................................................................... 1
2. Restrictions on Transferability............................................... 3
3. Restrictive Legend............................................................ 3
4. Notice of Proposed Transfers.................................................. 3
5. Registration.................................................................. 4
5.1 Requested Registration.................................................. 4
5.2 Company Registration.................................................... 6
5.3 Registration on Form S-3................................................ 7
5.4 Expenses of Registration................................................ 8
5.5 Registration Procedures................................................. 8
5.6 Lockup Agreement........................................................ 8
5.7 Indemnification......................................................... 9
5.8 Rule 144 Reporting...................................................... 11
5.9 Transfer of Registration Rights......................................... 12
5.10 Termination of Rights................................................... 12
5.11 Information by Holder................................................... 12
5.12 Subsequent Registration Rights.......................................... 12
6. Amendment..................................................................... 13
7. Counterparts.................................................................. 13
8. Governing Law................................................................. 13
9. Entire Agreement.............................................................. 13
10. Notices, etc.................................................................. 13
11. Prior Agreements; Waiver...................................................... 14
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of the
4th day of December, 1998 by and among Metapath Software International, Inc.,
a California corporation (the "COMPANY"), and certain of its shareholders,
all of whom are former shareholders of Mobile Systems International Holdings
Limited, a corporation organized under the laws of England and Wales ("MSIH")
or Metapath Software Corporation, a Delaware corporation ("METAPATH"), and
are listed on EXHIBIT A attached hereto (the "SHAREHOLDERS").
RECITALS:
WHEREAS, certain of the Shareholders are parties to that certain
Shareholders' Agreement dated March 26, 1998 between MSIH and the
shareholders of MSIH that are signatories thereto (the "MSIH AGREEMENT"), and
certain of the Shareholders are parties to that certain Amended and Restated
Registration Rights Agreement dated July 30, 1998 between Metapath and the
shareholders of Metapath that are signatories thereto (the "METAPATH
AGREEMENT" and, collectively, with the MSIH Agreement, the "PRIOR
AGREEMENTS") providing such Shareholders with, among other things,
registration rights;
WHEREAS, MSIH, Metapath, the Company and Metapath Acquisition
Corporation, a Delaware Corporation and a wholly owned subsidiary of the
Company ("SUB") have entered into that certain Agreement and Plan of
Reorganization dated September 21, 1998 (the "REORGANIZATION AGREEMENT"),
which provides for the merger of Sub with and into Metapath (the "MERGER")
and provides for a Scheme of Arrangement (the "SCHEME") in which the Company
agreed to issue shares of Common Stock to MSIH's shareholders in lieu of the
cancellation of ordinary shares of MSIH held by MSIH's shareholders;
WHEREAS, as a condition to the closing of the Merger and the
consummation of the Scheme, the Company has agreed to grant the Shareholders
registration rights with respect to the securities to be issued to the
Shareholders pursuant to the Merger and the Scheme; and
WHEREAS, the parties hereto also intend that this Agreement supersede
and replace the provisions of the Prior Agreements and all obligations and
rights with respect thereto.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMMON SHARES" shall mean those shares of the Company's Common Stock
issued to the Shareholders pursuant to the Merger or the Scheme.
"COMMON STOCK" shall mean the common stock, par value $0.001 per share,
of the Company.
"COMMON STOCK EQUIVALENTS" shall mean rights, warrants, convertible
securities or indebtedness, or other rights, exercisable for or convertible
or exchangeable into, directly or indirectly, Common Stock and securities
convertible or exchangeable into Common Stock, whether at the time of
issuance or upon the passage of time or the occurrence of some future event,
held by the Shareholders as of the date of this Agreement.
"CONVERSION STOCK" means shares of the Company's Common Stock issued or
issuable with respect to Common Stock Equivalents.
"HOLDERS" shall mean the holders of Registrable Securities or any
securities of the Company convertible into Registrable Securities; provided
that any transferee of a Holder shall have complied with the provisions of
Section 5.9.
"INITIATING HOLDERS" shall mean any Shareholders or transferees of
Shareholders under Section 5.9 hereof who in the aggregate are Holders of not
less than one-sixth (1/6) of the then outstanding Registrable Securities
or, if prior to the Company's first registered public offering of Common
Stock, from Holders of not less than one-third (1/3) of the then outstanding
Registrable Securities.
"REGISTRABLE SECURITIES" means (i) the Common Shares, (ii) the
Conversion Stock; and (iii) any Common Stock of the Company issued or
issuable in respect of any stock described in clauses (i) or (ii) above;
excluding in all cases, however, any Registrable Securities sold by a Holder
including a sale pursuant to a registration statement under this Agreement, a
transaction pursuant to Rule 144 promulgated under the Securities Act or any
other transaction in which registration rights are not transferred pursuant to
Section 5.9 hereof.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Section 5 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and
expenses, the fees and disbursements of one counsel to the selling Holders
and the expense of any special audits incident to or required by any such
registration, but excluding Selling Expenses (as defined below).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered
by the Holders.
2. RESTRICTIONS ON TRANSFERABILITY. The Registrable Securities shall
not be transferable except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Each holder of Registrable Securities will cause any proposed
transferee of such securities to agree to take and hold such securities
subject to the provisions and upon the conditions specified in this Agreement.
3. RESTRICTIVE LEGEND. Each certificate representing Registrable
Securities shall (unless otherwise permitted by the provisions of Section 4
below) be stamped or otherwise imprinted with a legend in the following form
(in addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT.
Each Holder consents to the Company making a notation on its records and
giving instructions to any transfer agent of its capital stock in order to
implement the restrictions on transfer established in this Agreement.
4. NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Registrable Securities, by acceptance thereof, agrees to comply
in all respects with the provisions of this Section 4. Prior to any proposed
transfer of any Registrable Securities, unless there is in effect a
registration statement under the Securities Act covering the proposed
transfer, the holder thereof shall give written notice to the Company of such
holders's intention to effect such transfer. Each such notice shall describe
the manner and circumstances of the proposed transfer in sufficient detail
and shall, if the Company so requests, be accompanied by either (i) a written
opinion of legal counsel (who shall be reasonably satisfactory to the
Company) addressed to the Company and reasonably satisfactory in form and
substance to the Company's counsel to the effect that the proposed transfer
of the Registrable Securities may be effected without registration under the
Securities Act or (ii) a "no action" letter from the Commission to the effect
that the transfer of such securities without registration will not result in
a recommendation by the staff of the Commission that action be taken with
respect thereto, whereupon the holder of such Registrable Securities shall be
entitled to transfer such Registrable Securities in accordance with the terms
of the notice delivered by the holder to the Company; provided, however, that
the Company shall not request an opinion of counsel or "no action" letter
with respect to (i) a transfer not involving a change in beneficial
ownership, (ii) a
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transaction involving the distribution without consideration of Registrable
Securities by the holder to any of its constituent partners or members, or
(iii) a transaction involving the transfer without consideration of
Registrable Securities by an individual holder during such holder's lifetime
by way of gift or on death by will or intestacy. Each certificate evidencing
the Registrable Securities transferred as above provided shall bear the
appropriate restrictive legend set forth in Section 3 above, except that such
certificate shall not bear such restrictive legend if in the opinion of
counsel for the Company such legend is not required in order to establish
compliance with any provisions of the Securities Act.
5. REGISTRATION.
5.1 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. In case the Company shall
receive from Initiating Holders a written request that the Company effect any
registration with respect to shares of Registrable Securities, the Company
will:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) as soon as practicable, effect such registration
(including, without limitation, appropriate qualification under applicable
state securities laws and appropriate compliance with applicable regulations
issued under the Securities Act and any other governmental requirements or
regulations) as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Registrable Securities as
are specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request by
delivering a written notice to such effect to the Company within 15 days
after the date of such written notice from the Company.
Notwithstanding the foregoing, the Company shall not be obligated to
take any action to effect or complete any such registration pursuant to this
Section 5.1;
(A) Prior to the earlier of (i) six months after
the effective date of the Company's first registered public offering of its
Common Stock or (ii) July 1, 2000;
(B) Unless the aggregate offering price of all
Registrable Securities sought to be registered by all Holders, net of
underwriting discounts and commissions, (i) would equal or exceed
$60,000,000, if prior to the Company's first registered public offering of
Common Stock or (ii) would equal or exceed $30,000,000 in all other instances;
(C) During the period starting with the date
sixth (60) days prior to the Company's estimated date of filing of, and
ending on the date six (6) months immediately following the effective date
of, any registration statement pertaining to securities of the Company (other
than a registration of securities in a Rule 145 transaction or with respect
to an
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employee benefit plan), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to
become effective;
(D) If the Company has effected a registration
pursuant to this Section 5.1, and such registration has been declared or
ordered effective within the prior twelve months; or
(E) If the Company shall furnish to the
Initiating Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors it would be
seriously detrimental to the Company or its shareholders for a registration
statement to be filed in the near future. In such case, the Company's
obligation to use its best efforts to register, qualify or comply under this
Section 5.1(a) shall be deferred for a period not to exceed 120 days from the
date of receipt of the written request from the Initiating Holders, provided
that the Company may not exercise this deferral right more than once per
twelve month period or three times during the term of this Agreement.
Subject to the foregoing clauses (A) through (E), the Company shall file
a registration statement covering the Registrable Securities so requested to
be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders.
(b) UNDERWRITING. In the event of a registration pursuant
to Section 5.1, the Company shall advise the Holders as part of the notice
given pursuant to Section 5.1(a)(i) that the right of any Holder to
registration pursuant to Section 5.1 shall be conditioned upon such Holder's
participation in any underwriting arrangements required by this Section 5.1,
and the inclusion of such Holder's Registrable Securities in the underwriting
to the extent requested shall be limited to the extent provided herein.
The Company shall, together with all Holders proposing to distribute
their securities through such underwriting, enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by a majority in interest of the Initiating Holders, but subject
to the Company's reasonable approval. Notwithstanding any other provision of
this Section 5.1, if the managing underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of
shares to be underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration (i) in the case of the
Company's first public offering of its Common Stock registered under the
Securities Act, to zero, and (ii) in the case of any other public offering,
to an amount no less than twenty percent (20%) of the total amount of
Common Stock included in such offering. The Company shall so advise all
Holders requesting to be included in the registration and underwriting of
such managing underwriter's determination, and the number of shares of
Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders requesting to be included
in the registration and underwriting in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities held by them at the time
of filing the registration statement. No Registrable Securities excluded from
the underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with the above
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provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares. If any Holder of
Registrable Securities disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company.
5.2 COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time or from time to
time the Company shall determine to register any of its equity securities,
either for its own account or the account of a Holder or other holders, other
than (i) a registration relating solely to employee benefit plans, (ii) a
registration relating solely to a Rule 145 transaction, or (iii) a
registration in which the only equity security being registered is Common
Stock issuable upon conversion of convertible debt securities which are also
being registered, the Company will:
(i) promptly give to each Holder written notice thereof;
and
(ii) include in such registration (and any related
qualifications including compliance with Blue Sky laws), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 15 days after the date of such
written notice from the Company, by any Holder.
(b) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting,
the Company shall so advise the Holders as a part of the written notice given
pursuant to Section 5.2(a)(i). In such event, the right of any Holder to
registration pursuant to Section 5.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable
Securities in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 5.2, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable Securities
to be included in such registration (i) in the case of the Company's first
public offering of its Common Stock registered under the Securities Act, to
zero, and (ii) in the case of any other public offering, to an amount no less
than twenty percent (20%) of all shares to be included in such offering. The
Company shall so advise all Holders requesting to be included in the
registration and underwriting of such managing underwriter's determination,
and the number of shares of Registrable Securities that may be included in
the registration and underwriting shall be allocated among all the Holders
requesting to be included in the registration and underwriting in proportion,
as nearly as practicable, to the respective amounts of Registrable Securities
held by them at the time of filing the registration statement. To facilitate
the allocation of shares in accordance with the above provisions, the Company
or the underwriters may round the number of shares allocated to any Holder to
the
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nearest 100 shares. If any Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice
to the Company.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have
the right to terminate or withdraw any registration initiated by it under
this Section 5.2 prior to the effectiveness of such registration whether or
not any Holder has elected to include securities in such registration.
5.3 REGISTRATION ON FORM S-3.
(a) REQUEST FOR REGISTRATION. In case the Company shall
receive from Holders a written request that the Company file a registration
statement on Form S-3 (or any successor form to Form S-3) for a public
offering of Registrable Securities, the aggregate price to the public of
which, net of underwriting discounts and commissions, would exceed
$1,500,000, and the Company is a registrant entitled to use Form S-3 to
register the Registrable Securities for such an offering, the Company shall
as soon as practicable cause such Registrable Securities to be registered for
the offering on such form and to cause such Registrable Securities to be
qualified in such jurisdictions as such Holder or Holders may reasonably
request; provided, however, that the Company shall not be required to effect
more than one registration pursuant to this Section 5.3 in any six (6) month
period. If such offer is to be an underwritten offer, the underwriters must
be reasonably acceptable to both such Holders and the Company. The Company
shall inform the other Holders of the proposed registration and offer them
upon at least 15 days written notice the opportunity to participate. In the
event the registration is proposed to be part of a firm commitment
underwritten public offering, the substantive provisions of Section 5.1(b)
shall be applicable to each such registration initiated under this Section
5.3, other than the provisions of Section 5.1(b) relating to the limitation
by the underwriters of Registrable Securities to be included in such
registration.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 5.3:
(i) If the Company, within ten (10) days of the receipt
of the request of the Initiating Holders, gives notice of its bona fide
intention to effect the filing of a registration statement with the
Commission within ninety (90) days of receipt of such request (other than
with respect to a registration statement relating to a Rule 145 transaction,
an offering solely to employees or any other registration which is not
appropriate for the registration of Registrable Securities);
(ii) During the period starting with the date sixty (60)
days prior to the Company's estimated date of filing of, and ending on the
date six (6) months immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to
become effective; or
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(iii) If the Company shall furnish to the Initiating
Holders a certificate signed by the President of the Company stating that,
in the good faith judgment of the Board of Directors, it would be seriously
detrimental to the Company or its stockholders for registration statements to
be filed in the near future, then the Company's obligation to use its best
efforts to file a registration statement shall be deferred for a period not
to exceed 120 days from the receipt of the request to file such registration
by such Initiating Holder or Holders, provided that the Company may not
exercise this deferral right more than once per twelve month period.
5.4 EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with any registration pursuant to Sections 5.1, Section
5.2 and 5.3 shall be borne by the Company. Notwithstanding the foregoing, in
the event that Initiating Holders cause the Company to begin a registration
pursuant to Section 5.1 or Section 5.3, and the request for such registration
is subsequently withdrawn by the Initiating Holders or such registration is
not completed due to failure to meet the net proceeds requirement set forth
in such section or is otherwise not successfully completed due to no fault
of the Company, all Holders shall be deemed to have forfeited their right to
a registration under Section 5.1, or a registration at the expense of the
Company under Section 5.3, as applicable, unless the Initiating Holders pay
for, or reimburse the Company for, the Registration Expenses incurred in
connection with such withdrawn or incomplete registration. Unless otherwise
stated herein, all Selling Expenses relating to securities registered on
behalf of the Holders and all other registration expenses shall be borne by
the Holders of such securities pro rata on the basis of the number of shares
so registered or proposed to be so registered.
5.5 REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep
each Holder advised in writing as to the initiation of such registration and
as to the completion thereof. The Company will;
(a) Prepare and file with the Commission a registration
statement and such amendments and supplements as may be necessary and use its
best efforts to cause such registration statement to become and remain
effective for at least 90 days or until the distribution described in the
registration statement has been completed, whichever first occurs.
(b) Furnish to the Holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters
may reasonably request in order to facilitate the public offering of such
securities.
(c) 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.
5.6 LOCKUP AGREEMENT. In consideration for the Company
agreeing to its obligations under this Agreement, each Holder hereby agrees
in connection with the first firm commitment underwritten registration of the
Company's securities not to sell, make any short sale
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of, loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities (other than those included in the registration) without
the prior written consent of the Company or underwriters managing the offering,
as the case may be, for a period of up to 180 days from the effective date of
such registration as the underwriters may specify; provided, however, that such
Holder shall be relieved of its obligations under this Section 5.6 unless all
executive officers and directors of the Company enter into similar agreements.
Each Holder hereby agrees that, upon the request of the Company or the
underwriters, it will confirm in writing the provisions of this Section 5.6.
5.7 INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its
officers, directors and partners and such Holder's legal counsel and
independent accountants, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including, but not limited to, any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or
based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular
or other document, or any amendment or supplement thereto, incident to any
such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act, the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), any state securities law or of any
rule or regulation promulgated under the Securities Act, the Exchange Act or
any state securities law, applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors and partners and such Holder's legal counsel and
independent accountants, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission or alleged untrue statement or
omission in a registration statement or prospectus, made in reliance upon and
in conformity with written information furnished to the Company by such
Holder or underwriter specifically for use therein; provided, however, that
the foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any such untrue statement, alleged untrue statement,
omission or alleged omission made in a preliminary prospectus on file with
the Commission at the time the registration statement becomes effective or
the amended prospectus filed with the Commission pursuant to Rule 424(b) (the
"FINAL PROSPECTUS"), such indemnity agreement shall not inure to the benefit
of any underwriter or any Holder, if there is no underwriter, if the untrue
statement (or alleged untrue statement) or omission (or alleged omission) was
corrected in the Final Prospectus and a copy of the Final
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Prospectus was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Securities
Act.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and its legal counsel and independent accountants,
each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such Holders,
such directors, officers, partners legal counsel, independent accountants,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder specifically for use therein; provided,
however, that the obligations of such Holders hereunder shall be limited to an
amount equal to the proceeds to each such Holder of Registrable Securities sold
as contemplated herein and provided further that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement, alleged untrue statement, omission or alleged omission made
in a preliminary prospectus on file with the Commission at the time the
registration statement becomes effective or the Final Prospectus, such indemnity
agreement shall not inure to the benefit of the Company, any underwriter or any
Holder, if there is no underwriter, if the untrue statement) or omission (or
alleged omission) was corrected in the Final Prospectus and a copy of the Final
Prospectus was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Securities
Act.
(c) Each party entitled to indemnification under this Section
5.7 (the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (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 unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, 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 Agreement. 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 judgement or enter into any
settlement which does not include as an unconditional term thereof the giving by
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the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 5.7 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred
to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, will contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party will be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(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 will control.
(f) The obligations of the Company and the Holders under this
Section 5.7 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement and otherwise.
5.8 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission that may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and Securities Exchange Act of 1934, as amended (at any time
after it has become subject to such reporting requirements);
(c) Furnish to holders of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by the
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Company for an offering of its securities to the general public), and of the
Securities Act and the Securities Exchange Act of 1934 (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.
5.9 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company
to register securities granted Holders under Sections 5.1, 5.2 and 5.3 may be
assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by the Holder provided that: (i) such
transfer is otherwise effected in accordance with applicable securities laws and
the terms of this Agreement, (ii) such assignee or transferee acquires at least
an amount equal to 400,000 Common Shares (or all such shares originally
purchased from the Company by Holder, if less than 400,000) that have not been
sold to the public (other than an acquisition pursuant to an open market
purchase), (iii) written notice is promptly given to the Company, (iv) such
transferee is not a person reasonably deemed to be a competitor of the Company
by the Company's Board of Directors and (v) such transferee agrees to be bound
by the provisions of this Agreement. Notwithstanding the foregoing, the rights
to cause the Company to register securities may be assigned without compliance
with item (ii) above to (x) any constituent partner, member, or shareholder of a
Holder which is a partnership, limited liability company or corporation; (y) a
family member of a Holder or trust for the benefit of a Holder, the spouse of a
Holder or issue of a Holder, or (z) any corporation, partnership, limited
liability company or other entity of which at least 75% in interest is owned or
controlled, directly or indirectly, by one or more of the persons described in
(x) or (y). For purposes of this Section 5.9, Holders shall be entitled to
aggregate the Registrable Securities held by Holders who are their Affiliates
(as defined under the Securities Act) for purposes of meeting such minimum share
amounts.
5.10 TERMINATION OF RIGHTS. The rights granted pursuant to Sections
5.1, 5.2 and 5.3 of this Agreement shall terminate as to any Holder upon the
earlier of (i) the date three years after the effective date of the Company's
initial public offering of its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement on Form S-1 under the
Securities Act and (ii) such time as a public market for the Company's Common
Stock exists and the Holder may sell all Registrable Securities held by the
Holder within a three-month period under Rule 144 under the Securities Act.
5.11 INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held
by them and the distribution proposed by such Holder or Holders as the Company
may request in writing and as shall be required in connection with any
registration referred to in this Agreement.
5.12 SUBSEQUENT REGISTRATION RIGHTS. Other than capital stock, or
options or warrants to purchase capital stock of the Company, issued to
financial institutions or lessors in connection with commercial credit
arrangements, equipment financings or similar transactions,
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approved by the Board of Directors, from and after the date of this
Agreement, the Company shall not, without prior written consent of the
Holders of at least a majority of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder
of any securities of the Company which would grant such holder or prospective
holder any or all of the registration rights contemplated herein.
6. AMENDMENT. Other than any supplement or amendment to this Agreement
to add additional parties pursuant to Section 5.12, which shall not require the
approval of any Holders of Registrable Securities, this Agreement and any term
hereof may be amended, waived, discharged or terminated by a written instrument
signed (in one or more counterparts) by the Company and by Holders of a majority
in interest of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section 6 shall be binding upon each
Holder whether or not such Holder consented in writing to the amendment or
waiver.
7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. Any party added to this Agreement
pursuant to Section 5.12 hereof shall execute a counterpart signature page to
this Agreement, and upon the execution of such counterpart signature page,
EXHIBIT A shall be supplemented to include the information applicable to such
signatory.
8. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California, without regard to its principles of conflicts of laws.
9. ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties regarding the subject matter
hereof. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon the successors, assigns,
heirs, executors and administrators of the parties hereto.
10. NOTICES ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by facsimile
transmission, by hand or by messenger, addressed:
(a) if to a Holder, at such Holder's address as set forth in
EXHIBIT A, or at such other address as such Holder shall have furnished
to the Company.
(b) if to the Company, to:
Metapath Software International, Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attn: President
Phone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
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or at such other address as the Company shall have furnished to the Holders,
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally or by facsimile transmission, or, if sent by mail, at
the earlier of its receipt or 72 hours after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid.
11. PRIOR AGREEMENTS WAIVER. This Agreement supersedes and replaces the
Prior Agreements in their entirety, and such Prior Agreements shall be of no
further force or effect upon execution of this Agreement by the Company and
by the requisite number of shareholder signatories required pursuant to each
such Prior Agreement to terminate each such Prior Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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The foregoing REGISTRATION RIGHTS AGREEMENT is hereby executed as of the
date first above written.
"COMPANY" METAPATH SOFTWARE INTERNATIONAL, INC
By:
----------------------------------
Name:
Title:
"SHAREHOLDERS"
[COUNTERPART SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
EXHIBIT A
SHAREHOLDERS:
Bessec Ventures IV L.P. Norwest Venture Capital
Bessemer Venture Investors ▇.▇. ▇▇▇▇▇▇ Brothers Venture Capital Partners I, L.P.
Bessemer Venture Partners IV L.P. RRE Investors, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ RRE Investors Funds, L.P.
GAP Coinvestment Partners, L.P. Nisho Iwai American Corporation
General Atlantic Partners 30, L.P. Nisho Awai Corporation
General Atlantic Partners 46, L.P. Crossover Fund II, ▇.▇.
▇▇▇▇▇▇▇ (1995) Family Settlement Crossover Fund IIA, ▇.▇.
▇▇▇▇▇▇▇ (1996) Family Settlement Omega Ventures II, ▇.▇.
▇▇▇▇▇▇▇ (1997) Settlement Omega Ventures II Cayman, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TCV II, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TCV II, V.O.F.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TCV II (Q), L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ TCV II Strategic Partners, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1997 Settlement TCV II C.V.
M. ▇▇▇▇▇▇▇▇ 1st Family Settlement U.S. Venture Partners IV, L.P.
M. ▇▇▇▇▇▇▇▇ 2nd Family Settlement Second Ventures II, L.P.
▇▇▇▇ ▇▇▇▇ USVP Entrepreneur Partners II, L.P.
The Nuru Settlement 2180 Associates Fund
The Rajab Settlement Belisarius Corp. (▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇)
▇▇▇▇▇▇ ▇▇▇▇▇▇ Bessemer Venture Partners III, L.P.
▇▇▇▇ ▇▇▇▇▇ BVP III Special Situations L.P.
Networks Northwest, Inc. G. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
