EXHIBIT 10.9
THIRD AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This THIRD AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of
December 20, 2004 (this "AGREEMENT"), is entered into by and among Vocus, Inc.,
a Delaware corporation (the "COMPANY"), the persons listed on Schedule A
attached hereto as owners of shares of the Company's Series A Convertible
Preferred Stock (the "SERIES A INVESTORS"), the persons listed on Schedule A
attached hereto as owners of shares of the Company's Series B Convertible
Preferred Stock (the "SERIES B INVESTORS") and the persons listed on Schedule A
attached hereto as owners of shares of the Company's Series C Convertible
Preferred Stock (the "SERIES C INVESTORS," and collectively with the Series A
Investors and Series B Investors, the "INVESTORS" and each an "INVESTOR").
WHEREAS, pursuant to that certain Series A Convertible Preferred Stock
Purchase Agreement, dated as of January 14, 2000, the Series A Investors
purchased, and the Company issued and sold, 5,158,628 shares of the Company's
Series A Convertible Preferred Stock, par value $.01 per share ("SERIES A
PREFERRED STOCK");
WHEREAS, pursuant to that certain Series B Convertible Preferred Stock
Purchase Agreement, dated as of October 20, 2000, as amended by that certain
Amendment No. 1 and Joinder to the Series B Convertible Preferred Stock Purchase
Agreement, dated as of June 18, 2001, and that certain Second Amendment to the
Series B Convertible Preferred Stock Purchase Agreement, dated as of January 31,
2003, the Series B Investors purchased an aggregate of 10,135,973 shares of the
Company's Series B Convertible Preferred Stock, par value $.01 per share
("SERIES B PREFERRED STOCK");
WHEREAS, the Series A and B Investors are parties to that certain Second
Amended and Restated Registration Rights Agreement, dated as of June 18, 2001
(the "PRIOR AGREEMENT"), setting forth certain demand and incidental
registration rights for such Investors;
WHEREAS, the Company and the Series C Investors are parties to the Series
C Convertible Preferred Stock Purchase Agreement, dated as of the date hereof
(the "PURCHASE AGREEMENT"), pursuant to which the Series C Investors will buy,
and the Company will issue and sell, the Company's Series C Convertible
Preferred Stock, par value $.01 per share (the "SERIES C PREFERRED STOCK");
WHEREAS, the obligations of the Company and the Series C Investors under
the Purchase Agreement are conditioned, among other things, upon the execution
and delivery of this Agreement by the Company and the Investors; and
WHEREAS, the parties hereto desire to amend and supersede the Prior
Agreement in its entirety.
NOW, THEREFORE, in consideration of these premises and intending to be
legally bound, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"AFFILIATE" means an "affiliate" as defined in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.
"COMMISSION" means the U.S. Securities and Exchange Commission, or any
other federal agency at the time administering the federal securities laws,
rules and regulations.
"COMMON STOCK" means the Company's common stock, $.01 par value per share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"PREFERRED STOCK" means the Series A, B and C Preferred Stock.
"QUALIFIED PUBLIC OFFERING" means the first underwritten public offering
of Common Stock pursuant to a Registration Statement.
"REGISTRABLE SHARES" means (i) the Series A Conversion Shares, (ii) the
Series B Conversion Shares, (iii) the Series C Conversion Shares, (iv) any
shares of Common Stock purchased or acquired by the Investors subsequent to the
date hereof and (v) any other shares of Common Stock of the Company issued in
respect of the shares described in clauses (i), (ii), (iii) and (iv) above (as a
result of stock splits, stock dividends, reclassifications, recapitalizations,
or similar events); provided, however, that shares of Common Stock that are
Registrable Shares shall cease to be Registrable Shares (x) upon any sale of
such shares pursuant to a Registration Statement or any open market sale of such
shares pursuant to Section 4(1) of the Securities Act or Rule 144 under the
Securities Act, (y) upon any sale of such shares in any manner to a person or
entity which, by virtue of Section 15 of this Agreement, is not entitled to the
rights provided by this Agreement or (z) with respect to any Investor, when such
Investor is eligible to sell, transfer or otherwise convey all of such
Investor's Registrable Shares pursuant to Rule 144 under the Securities Act in
any three-month period. Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include shares of Common Stock issuable
upon conversion of Preferred Stock even if such conversion has not yet been
effected.
"REGISTRATION STATEMENT" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"SERIES A, B OR C CONVERSION SHARES" means the shares of Common Stock into
which each share of Series A, B or C Preferred Stock, respectively, has been
converted or is then convertible.
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"STOCKHOLDERS" means the Investors and any persons or entities to whom the
rights granted under this Agreement are properly transferred by the Investors,
their successors or assigns pursuant to Section 15 hereof.
2. Sale or Transfer of Preferred Stock; Legend.
2.1. Transfer Restrictions. The Preferred Stock and Registrable
Shares and shares issued in respect of shares of Preferred Stock or Registrable
Shares shall not be sold or transferred unless either (i) they first shall have
been registered under the Securities Act or (ii) the Company first shall have
been furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Securities Act. In no event may shares of
Series A Preferred Stock or Series A Conversion Shares be transferred to any
actual or potential competitor of the Company, as determined in good faith by
the Board of Directors.
2.2. Permitted Transfers. Notwithstanding anything to the contrary
contained in the foregoing Section 2.1, no registration or opinion of counsel
shall be required for either (i) a transfer pursuant to Section 15 hereof and,
subject to an exemption under state and federal securities laws, by an Investor
to an Affiliate of the Investor, or a partner of such Investor or a retired
partner of such Investor who retires after the date hereof, or to the estate of
any such partner or retired partner, if the transferee agrees in writing to be
subject to the terms of this Agreement to the same extent as if he were an
original Investor hereunder, or (ii) a transfer made in accordance with Rule 144
under the Securities Act.
2.3. Legends.
(a) Each certificate representing Preferred Stock or
Registrable Shares and shares issued in respect of Preferred Stock and
Registrable Shares shall bear a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES
LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS OR PURSUANT TO A
WRITTEN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
(b) In addition to the legend set forth in Section 2.3(a),
each certificate representing Preferred Stock and shares issued in respect of
Preferred Stock shall bear a legend substantially in the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A REGISTRATION RIGHTS AGREEMENT, AS AMENDED FROM TIME TO TIME,
BETWEEN THE COMPANY AND
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THE REGISTERED OWNER OF THIS CERTIFICATE (OR THE REGISTERED OWNER'S
PREDECESSOR IN INTEREST), AND SUCH AGREEMENT IS AVAILABLE FOR INSPECTION
WITHOUT CHARGE AT THE OFFICE OF THE SECRETARY OF THE COMPANY.
(c) The foregoing legends shall be removed from the
certificates representing any Registrable Shares at such time as they are sold
pursuant to Rule 144 under the Securities Act.
2.4. Rule 144 Information. The Company agrees, upon the request of
an Investor, to make available to such Investor and to any prospective permitted
transferee of any Preferred Stock or Registrable Shares of such Investor the
information concerning the Company described in Rule 144A(d)(4) under the
Securities Act.
3. Demand Registrations.
3.1. Series A Demand Registration Rights. At any time after the
closing of the Qualified Public Offering, the Series A Investors or any
permitted transferee of the Series A Investors holding in the aggregate at least
40% of the Registrable Shares collectively held by the Series A Investors and
any permitted transferees of the Series A Investors may request, in writing,
that the Company effect a registration on Form S-1 (or any successor form) of
Registrable Shares owned by such Stockholder or Stockholders covering shares of
Common Stock having an aggregate offering price of at least $3,000,000 (based on
the then current market price or fair value); provided, however, that the
Company shall not be required to effect any registration (other than on Form S-2
or S-3 or any successor form relating to secondary offerings) within six months
after the effective date of any other Registration Statement of the Company. If
the holders initiating the registration intend to distribute Registrable Shares
by means of an underwriting, they shall so advise the Company in their request.
In the event such registration is underwritten, the right of other Stockholders
to participate shall be conditioned on such Stockholders' participation in such
underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have included
in such registration such of their Registrable Shares as such Stockholders may
request in such notice of election, subject to the approval of the underwriter
managing the offering. If, in the opinion of the underwriter managing the
offering, the registration of all, or part of, the Registrable Shares that such
Stockholders have requested to be included in the offering would materially and
adversely affect such offering, then each Stockholder shall have the right to
participate with respect to its Registrable Shares pro rata based upon the
number of Registrable Shares then held by such Stockholder compared to the total
number of Registrable Shares then held by all of the participating Stockholders.
Thereupon, the Company shall, as expeditiously as possible, use its best efforts
to effect the registration, on Form S-1 (or any successor form), of all
Registrable Shares that the Company has been requested so to register.
3.2. Series B Demand Registration Rights. At any time after the
date hereof, the Series B Investors or any permitted transferee of the Series B
Investors holding in the aggregate at least 51% of the Registrable Shares
collectively held by the Series B Investors
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(excluding any Series A Conversion Shares and any other shares of Common Stock
of the Company issued in respect of the Series A Preferred Stock or the Series A
Conversion Shares (because of stock splits, stock dividends, reclassifications,
recapitalizations and the like)) and any permitted transferees of the Series B
Investors may request, in writing, that the Company effect a registration on
Form S-l (or any successor form) of Registrable Shares owned by such Stockholder
or Stockholders covering shares of Common Stock having an aggregate offering
price of at least $3,000,000 (based on the then current market price or fair
value); provided, however, that the Company shall not be required to effect any
registration (other than on Form S-2 or S-3 or any successor form relating to
secondary offerings) within six months after the effective date of any other
Registration Statement of the Company. If the holders initiating the
registration intend to distribute the Registrable Shares by means of an
underwriting, they shall so advise the Company in their request. In the event
such registration is underwritten, the right of other Stockholders to
participate shall be conditioned on such Stockholders' participation in such
underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have included
in such registration such of their Registrable Shares as such Stockholders may
request in such notice of election, subject to the approval of the underwriter
managing the offering. If, in the opinion of the underwriter managing the
offering, the registration of all, or part of, the Registrable Shares that such
Stockholders have requested to be included in the offering would materially and
adversely affect such offering, then each Stockholder shall have the right to
participate with respect to its Registrable Shares pro rata based upon the
number of Registrable Shares then held by such Stockholder compared to the total
number of Registrable Shares then held by all of the participating Stockholders.
Thereupon, the Company shall, as expeditiously as possible, use its best efforts
to effect the registration, on Form S-l (or any successor form), of all
Registrable Shares that the Company has been requested so to register.
3.3. Series C Demand Registration Rights. At any time after the
earlier of (a) October 29, 2009 or (b) the closing of the Qualified Public
Offering, the Series C Investors or any permitted transferee of the Series C
Investors holding in the aggregate at least 51% of the Registrable Shares
collectively held by the Series C Investors (excluding any Series A Conversion
Shares and any other shares of Common Stock of the Company issued in respect of
the Series A Preferred Stock or the Series A Conversion Shares (because of stock
splits, stock dividends, reclassifications, recapitalizations and the like)) and
any permitted transferees of the Series C Investors may request, in writing,
that the Company effect a registration on Form S-l (or any successor form) of
Registrable Shares owned by such Stockholder or Stockholders covering at least
20% of the Series C Conversion Shares (or any lesser percentage, if the
anticipated aggregate offering price of the Series C Conversion Shares proposed
to be registered is at least $3,000,000 (based on the then current market price
or fair value)); provided, however, that the Company shall not be required to
effect any registration (other than on Form S-2 or S-3 or any successor form
relating to secondary offerings) within six months after the effective date of
any other Registration Statement of the Company. If the holders initiating the
registration intend to distribute the Registrable Shares by means of an
underwriting, they shall so advise the Company in their request. In the event
such registration is underwritten, the right of other Stockholders to
participate shall be conditioned on such Stockholders' participation in such
underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice
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to the Company within 30 days after the Company provides its notice, to elect to
have included in such registration such of their Registrable Shares as such
Stockholders may request in such notice of election, subject to the approval of
the underwriter managing the offering. If, in the opinion of the underwriter
managing the offering, the registration of all, or part of, the Registrable
Shares that such Stockholders have requested to be included in the offering
would materially and adversely affect such offering, then each Stockholder shall
have the right to participate with respect to its Registrable Shares pro rata
based upon the number of Registrable Shares then held by such Stockholder
compared to the total number of Registrable Shares then held by all of the
participating Stockholders. Thereupon, the Company shall, as expeditiously as
possible, use its best efforts to effect the registration, on Form S-l (or any
successor form), of all Registrable Shares that the Company has been requested
so to register.
3.4. Form S-3 Registration. To the extent that the Company is
eligible to file a Registration Statement on Form S-3 (or any successor form
relating to secondary offerings), holders of Registrable Shares will have the
right to require the Company to effect an unlimited number of Registration
Statements on Form S-3 (or any successor form), of Registrable Shares having an
aggregate offering price in each registration on Form S-3 in excess of
$1,000,000 (based on the then current public market price), each such request
for registration to be made by written notice to the Company. Upon receipt of
any such request, the Company shall promptly give written notice of such
proposed registration to all Stockholders. Such Stockholders shall have the
right, by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such Stockholders may request in such notice of
election. Thereupon, the Company shall, as expeditiously as possible, use its
best efforts to effect the registration on Form S-3 (or any successor form) of
all Registrable Shares that the Company has been requested to register. If the
registration involves an underwritten offering and, if in the opinion of the
underwriter managing the offering, the registration of all, or part of, the
Registrable Shares that such Stockholders have requested to be included in the
offering would materially and adversely affect such offering, then each
Stockholder shall have the right to participate in such offering pro rata based
upon the number of Registrable Shares then held by such Stockholder compared to
the total number of Registrable Shares then held by all of the participating
Stockholders.
3.5. Number of Registrations; Restriction Period. The Company shall
be required to effect not more than two registrations pursuant to each of
Section 3.1, 3.2 and 3.3 above; provided, however, that the Company shall not be
required to take any action to effect any registration pursuant to any of
Sections 3.1, 3.2 or 3.3 during the period commencing on the date on which any
Registration Statement (other than on Form S-2 or S-3 or any successor form
relating to secondary offerings), including, without limitation, any
Registration Statement filed pursuant to Section 3.1, 3.2 and 3.3, has been
declared or ordered effective and ending six months after such date. A
registration pursuant to Section 3.2 will not be included for purposes of this
Section 3.5 unless all Registrable Shares requested to be registered in such
registration are, in fact, registered in such registration.
3.6. Registration Delay. If at the time of any request to register
Registrable Shares pursuant to this Section 3, the Company is engaged or has
fixed plans to engage within 60 days of the time of the request in a registered
public offering as to which the Stockholders may include Registrable Shares
pursuant to Section 4 or is engaged in any other activity that, in the
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good faith determination of the Company's Board of Directors, would be adversely
affected by the requested registration to the material detriment of the Company,
then the Company may at its option direct that such request be delayed for a
period not in excess of 120 days from the effective date of such offering or the
date of commencement of such other material activity, as the case may be, such
right to delay a request to be exercised by the Company not more than once in
any one-year period.
4. Incidental Registration.
4.1. Notice. Whenever the Company proposes to file a Registration
Statement at any time and from time to time, it will, prior to such filing, give
written notice to all Stockholders of its intention to do so and, upon the
written request of a Stockholder or Stockholders given within 20 days after the
Company provides such notice (which request shall state the intended method of
disposition of such Registrable Shares), the Company shall use its best efforts
to cause all Registrable Shares that the Company has been requested by such
Stockholder or Stockholders to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
such Stockholder or Stockholders; provided that the Company shall have the right
to postpone or withdraw any registration effected pursuant to this Section 4
without obligation to any Stockholder.
4.2. Limitations. In connection with any offering under this
Section 4 involving an underwriting, the Company shall not be required to
include any Registrable Shares in such underwriting unless the holders thereof
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
opinion of the underwriters, jeopardize the success of the offering by the
Company. If, in the opinion of the managing underwriter, the registration of
all, or part of, the Registrable Shares that the holders have requested to be
included would materially and adversely affect such public offering, then the
Company shall be required to include in the underwriting only that number of
Registrable Shares, if any, that the managing underwriter believes may be sold
without causing such adverse effect; provided that (i) in no event shall the
amount of Registrable Shares included in the offering be reduced below 25% of
the total number of shares of Common Stock (giving effect to the conversion into
Common Stock of all securities convertible thereto) included in the offering,
unless the offering is the Company's first underwritten public offering or the
shares being offered are solely for the Company's own account, in which case the
amount of Registrable Shares included in the offering may be reduced to zero,
and (ii) no persons or entities other than the Company, the Stockholders and
persons or entities holding registration rights granted in accordance with
Section 11 hereof shall be permitted to include securities in the offering. If
the number of Registrable Shares to be included in the underwriting in
accordance with the foregoing is less than the total number of shares that the
holders of Registrable Shares have requested to be included, then the holders of
Registrable Shares who have requested registration and other holders of shares
of Common Stock entitled to include shares of Common Stock in such registration
shall participate in the underwriting pro rata based upon their total ownership
of shares of Common Stock (giving effect to the conversion into Common Stock of
all securities convertible thereto). If any holder would thus be entitled to
include more shares than such holder requested to be registered, the excess
shall be
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allocated among other requesting holders pro rata based upon their total
ownership of Registrable Shares.
5. Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any Registrable Shares under the Securities Act, the Company
shall:
(a) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become and remain effective until the completion of
the distribution;
(b) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any other
offering, until the earlier of the sale of all Registrable Shares covered
thereby or 120 days after the effective date thereof;
(c) as expeditiously as possible furnish to each selling
Stockholder such reasonable number of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the selling Stockholder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Shares owned by the selling Stockholder;
(d) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities or Blue Sky laws of such states as the selling Stockholders
shall reasonably request, and do any and all other acts and things that may be
reasonably necessary to enable the selling Stockholders to consummate the public
sale or other disposition in such states of the Registrable Shares owned by the
selling Stockholder; provided, however, that the Company shall not be required
in connection with this Section 5(d) to qualify as a foreign corporation in any
jurisdiction;
(e) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering; each
Stockholder participating in such underwriting shall also enter into and perform
its obligations under such an agreement;
(f) notify each holder of Registrable Shares 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, and supply or cause to be supplied to each such holder of Registrable
Shares a reasonable number of prospectus supplements or amended prospectuses
correcting any such errors;
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(g) use its best efforts to furnish, on the date that such
Registrable Shares are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii)
a letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters; and
(h) use its best efforts to have any Registrable Shares
listed for trading on the exchange or market on which the Company's Common Stock
is then admitted for trading.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
6. Allocation of Expenses. The Company will pay all Registration
Expenses (as defined below) of all registrations under this Agreement; provided,
however, that if a registration under Section 3 is withdrawn at the request of
the Stockholders requesting such registration (other than as a result of
information concerning the business or financial condition of the Company that
is made known to the Stockholders after the date on which such registration was
requested) and if the requesting Stockholders elect not to have such
registration counted as a registration requested under Section 3, the requesting
Stockholders shall pay the Registration Expenses of such registration pro rata
in accordance with the number of their Registrable Shares included in such
registration. For purposes of this Section, the term "REGISTRATION EXPENSES"
shall mean all expenses incurred by the Company in complying with this Agreement
including, without limitation, all registration and filing fees, exchange
listing fees, printing expenses, fees and disbursements of counsel for the
Company and the reasonable and customary fees and expenses of one counsel
selected by the selling Stockholders to represent the selling Stockholders,
state Blue Sky fees and expenses, and the expense of any special audits incident
to or required by any such registration (such expenses of a special audit not to
exceed $15,000 in the case of a registration pursuant to Section 3 hereof), but
excluding underwriting discounts, selling commissions and the fees and expenses
of selling Stockholders' own counsel (other than the counsel selected to
represent all selling Stockholders). Any expenses in excess of $15,000 incident
to a special audit in connection with a registration pursuant to Section 3
hereof shall be borne ratably by the selling Stockholders.
7. Indemnification and Contribution.
7.1. Company Indemnification and Contribution. In the event of any
registration of any of the Registrable Shares under the Securities Act pursuant
to this Agreement, the Company will indemnify and hold harmless the seller of
such Registrable Shares, each
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underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action promptly as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or omission made in such Registration Statement, preliminary
prospectus or prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in writing, by or
on behalf of such seller, underwriter or controlling person specifically for use
in the preparation thereof.
7.2. Holder Indemnification. In the event of any registration of
any of the Registrable Shares under the Securities Act pursuant to this
Agreement, each seller of Registrable Shares, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, the Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such seller,
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however, that the
obligations of a Stockholder hereunder shall be limited to an amount equal to
the net proceeds to such Stockholder of Registrable Shares sold as contemplated
herein. Subject to the limitations set forth in the preceding sentence, such
seller will reimburse the Company, such directors and officers, underwriter or
controlling person for any legal or any other expenses reasonably incurred by
such person in connection with investigating or defending any such loss, claim,
damage, liability or action promptly as such expenses are incurred.
10
7.3. Notice. Each party entitled to indemnification under this
Section 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 be
unreasonably withheld); and provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall relieve the
Indemnifying Party of its obligations under this Agreement to the extent that
the Indemnifying Party was materially prejudiced by such failure. The
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall pay such expense if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would, in the reasonable opinion of such counsel, be
inappropriate due to actual differing interests between the Indemnified Party
and any other party represented by such counsel in such proceeding. No
Indemnifying Party in the defense of any such claim or litigation shall, except
with the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect of such claim or litigation, and no Indemnified
Party shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party.
7.4. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Section 7 is due in accordance with its terms but for any reason is held to be
unavailable to an Indemnified Party in respect to any losses, claims, damages
and liabilities referred to herein, then the Indemnifying Party shall, in lieu
of indemnifying such Indemnified Party, contribute to the amount paid or payable
by such Indemnified Party as a result of such losses, claims, damages or
liabilities to which such party may be subject in proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand and the
Indemnified Party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact related
to information supplied by the Indemnifying Party or the Indemnified Party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph of Section 7, (a) in no case
shall any Stockholder who may be an Indemnifying Party be liable or responsible
for any amount in excess of the net proceeds received by such Stockholder from
the offering of Registrable Shares, and (b) the Company shall be liable and
responsible for any amount in excess of such proceeds to all participating
Stockholders who may be Indemnifying Parties; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party or parties
11
under this Section 7, notify such party or parties from whom such contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve such party from any other
obligation it or they may have thereunder or otherwise under this Section 7. No
party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its prior written consent, which consent
shall not be unreasonably withheld; provided, however, that it shall not be
unreasonable to withhold such consent if no release is granted in connection
therewith or if such consent would constitute an admission of guilt.
8. Indemnification with Respect to Underwritten Offering. In the event
that Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 3, the Company agrees to enter into an
underwriting agreement containing customary representations and warranties with
respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such issuer
including, without limitation, customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
9. Information by Holder. Each holder of Registrable Shares included in
any registration shall furnish to the Company such information regarding such
holder and the distribution proposed by such holder as the Company may request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
10. "Market Stand-off" Agreement. Each Stockholder, if requested by the
Company and an underwriter of Common Stock or other securities of the Company,
hereby agrees not to sell, loan, pledge, hypothecate, encumber or otherwise
transfer or dispose of any Registrable Shares or other securities of the Company
held by such Stockholder for a specified period of time (not to exceed 180 days
in the case of the first such Registration Statement covering Common Stock of
the Company to be sold on its behalf to the public in an underwritten offering,
and not to exceed 90 days in the case of all other Registration Statements)
following the effective date of a Registration Statement; provided, however,
that all Stockholders holding not less than 5% of the Common Stock outstanding
(including shares of Common Stock issuable upon the conversion of Preferred
Stock or other convertible securities, or upon the exercise of options, warrants
or rights) and all officers and directors of the Company shall enter into
similar agreements. Such agreement shall be in writing in a form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the Registrable Shares or other securities subject
to the foregoing restriction until the end of the stand-off period.
11. Limitations on Subsequent Registration Rights. The Company shall
not, without the prior written consent of Stockholders holding at least 60% of
the Registrable Shares, enter into any agreement (other than this Agreement)
with any holder or prospective holder of any securities of the Company that
would allow such holder or prospective holder either (a) to include securities
of the Company in any registration filed under Section 3 or 4, or (b) to make a
demand registration that could result in such Registration Statement being
declared effective prior to the Qualified Public Offering. Additionally, the
Company shall not, without the prior written consent of the holders of at least
60% of the Series C Conversion Shares, enter into any agreement or otherwise
grant rights to any holder or prospective holder of any securities of the
12
Company that would allow such holder or prospective holder to include securities
of the Company in any registration filed under Section 3 or 4, unless such
agreement, instrument or arrangement granting such rights expressly states that
the rights of such holder or prospective holder to include any securities in any
such registration are subordinate to the rights of the holders of Series B and C
Conversion Shares hereunder and any securities requested by such holders to be
registered in any such offering shall be reduced to zero before the Registrable
Shares held by the holders of Series B and C Conversion Shares will be reduced
pursuant to Section 4.2 hereof.
12. Rule 144 Requirements. After the earliest of (i) the closing of the
sale of securities of the Company pursuant to a Registration Statement, (ii) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(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 the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request
(i) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c), and the reporting requirements of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), (ii) a copy of the most recent annual or quarterly
report of the Company, and (iii) such other reports and documents of the Company
as such holder may reasonably request to avail itself of any similar rule or
regulation of the Commission allowing it to sell any such securities without
registration.
13. Selection of Underwriter. In the case of any registration effected
pursuant to this Agreement, the Company shall have the right to designate the
managing underwriter in any underwritten offering, subject to the approval of
the holders of a majority of the Registrable Shares requested to be included in
such offering, which approval shall not be unreasonably withheld.
14. Successors and Assigns. Except as provided in Section 15, the
provisions of this agreement shall be binding upon, and inure to the benefit of,
the respective successors, assigns, heirs, executors and administrators of the
parties hereto.
15. Transfers of Certain Rights.
15.1. Amount. The rights granted to each Investor under this
Agreement may be transferred only to a transferee who is an Affiliate of the
Investor or who acquires at least 20% of the Preferred Stock or Registrable
Shares held by such transferring Investor and its Affiliates.
13
15.2. Transferees. Any transferee (other than an Affiliate) to whom
rights under this Agreement are transferred shall, as a condition to such
transfer, deliver to the Company a written instrument by which such transferee
agrees to be bound by the obligations imposed upon the Investors under this
Agreement to the same extent as if such transferee were an Investor hereunder.
15.3. Subsequent Transferees. A transferee to whom rights are
transferred pursuant to this Agreement may not again transfer such rights to any
other person or entity, other than as provided in Sections 15.1 or 15.2 above.
15.4. Partners and Affiliates. Notwithstanding anything to the
contrary herein, an Investor may transfer rights granted to it under this
Agreement to any Affiliate or partner of such Investor to whom shares of
Preferred Stock are transferred pursuant to Section 2 and who delivers to the
Company a written instrument in accordance with Section 15.2 above and
containing the representation that the transfer is exempt from registration
under the Securities Act. In the event of such transfer, such Affiliate or
partner shall be deemed to be an Investor for purposes of this Section 15 and
may again transfer such rights to any other person or entity that acquires
shares of Preferred Stock from such Affiliate or partner, in accordance with,
and subject to, the provisions of Section 15.1, 15.2 and 15.3 above; provided,
however, that if an Investor transfers rights under this Agreement to its
partners at any time prior to the completion of the Qualified Public Offering,
the general partner of the Investor shall be deemed the sole recipient of
notices for all of such Investor's partners for the purposes of Section 16.6 of
this Agreement.
16. Miscellaneous.
16.1. No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities that is inconsistent
with or violates the rights granted to the holders of Registrable Shares in this
Agreement.
16.2. Adjustments Affecting Registrable Shares. The Company will not
take any action, or permit any change to occur, with respect to its securities
that would adversely affect the ability of the holders of Registrable Shares to
include such Registrable Shares in a registration undertaken pursuant to this
Agreement or that would adversely affect the marketability of such Registrable
Shares in any such registration.
16.3. Remedies. Any person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically (without posting
any bond or other security), to recover damages caused by reason of any breach
of any provision of this Agreement and to exercise all other rights granted by
law.
16.4. Amendments and Waivers. No term of this Agreement that inures
to the benefit of the Company may be amended, nor the observance of any term of
this Agreement waived (either generally or in a particular instance, and either
retroactively or prospectively), without the written consent of the Company. No
term of this Agreement that inures to the benefit of the holders of Series A
Conversion Shares may be amended, nor the observance of any term of this
Agreement waived (either generally or in a particular instance, and either
retroactively or prospectively), without the written consent of the holders of
all of the Series A
14
Conversion Shares then in existence; provided, however, that any such term may
be amended or any such observance waived with respect to all holders of Series A
Conversion Shares by written consent of the holders at least 60% of the Series A
Conversion Shares then in existence, if the amendment or waiver affects all such
holders in the same fashion, based on each such holder's proportionate ownership
of shares of Series A Preferred Stock. No term of this Agreement that inures to
the benefit of the holders of Series B Conversion Shares may be amended, nor the
observance of any term of this Agreement waived (either generally or in a
particular instance, and either retroactively or prospectively), without the
written consent of the holders of all of the Series B Conversion Shares then in
existence; provided, however, that any such term may be amended or any such
observance waived with respect to all holders of Series B Conversion Shares by
written consent of the holders at least 75% of the Series B Conversion Shares
then in existence, if the amendment or waiver affects all such holders in the
same fashion based on each such holder's proportionate ownership of shares of
Series B Preferred Stock. No term of this Agreement that inures to the benefit
of the holders of Series C Conversion Shares maybe amended, nor the observance
of any term of this Agreement waived (either generally or in a particular
instance, and either retroactively or prospectively), without the written
consent of the holders of all of the Series C Conversion Shares then in
existence; provided, however, that any such term may be amended or any such
observance waived with respect to all holders of Series C Conversion Shares by
written consent of the holders at least 75% of the Series C Conversion Shares
then in existence, if the amendment or waiver affects all such holders in the
same fashion based on each such holder's proportionate ownership of shares of
Series C Preferred Stock. Any such amendment or waiver effected in accordance
with this Section 16.4 shall be binding on all parties hereto, even if they do
not execute such consent. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision. This Agreement amends and restates in its entirety the Prior
Agreement, which agreement is hereby terminated and of no further force or
effect.
16.5. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware, without reference to the
conflict of laws provisions thereof.
16.6. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company:
Vocus, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
15
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
or at such other address or addresses as may have been furnished in writing by
such parties to the Investors.
If to the Investors, at the addresses set forth on the signature pages
hereto, or at such other address or addresses as may have been furnished to the
Company in writing by such Investor.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
16.7. Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, as determined by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining
provisions of this Agreement or any provision of the other Agreements shall not
in any way be affected or impaired thereby.
16.8. Titles and Subtitles. The titles of the sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
16.9. No Registration of Preferred Stock. The registration rights
contained herein apply only to the Common Stock, and the Company shall never be
obligated to register any of the Preferred Stock.
[SIGNATURE PAGE FOLLOWS]
16
IN WITNESS WHEREOF, the parties have executed this Third Amended and
Restated Registration Rights Agreement as of the date first written above.
VOCUS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President and
Chief Executive Officer
INVESTORS:
EDISON VENTURE FUND IV, ▇.▇. ▇▇▇▇▇▇ TECHNOLOGY PARTNERS
II LP
By: Edison Partners IV, L.P., its General By: LTP II LP, its General Partner
Partner By: LTP II GenPar LLC, its General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------- -------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Partner ▇▇▇▇▇ ▇▇▇▇▇, Managing Principal
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
STERLING VENTURE PARTNERS, LP
By: Sterling Venture Partners, LLC, its
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Managing Member
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19
SCHEDULE A
INVESTORS
Series A Investors
Edison Venture Fund IV, L.P.
Carmel Investments, LLP
Series B Investors
Lazard Technology Partners II ▇▇
▇▇▇▇▇▇ Venture Fund IV, L.P.
Sterling Venture Partners, LP
Series C Investors
Lazard Technology Partners II ▇▇
▇▇▇▇▇▇ Venture Fund IV, L.P.
Sterling Venture Partners, LP