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EXHIBIT 10.10
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of December 6,
1999, by and among Futurelink Corp., a Delaware corporation (the "Company") and
CPQ Holdings, Inc., a Delaware corporation (the "Stockholder").
Terms and Conditions
In consideration of the mutual covenants and agreements contained in
this Agreement and the Purchase Agreement, and intending to be legally bound,
the parties hereto agree as follows:
Section 1 . Definitions. As used in this Agreement, the following terms
have the meanings indicated below or in the referenced sections of this
Agreement:
"Common Stock." The Company's Common Stock, $.0001 par value per share,
as the same may be constituted from time to time.
"Exchange Act." The Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
"NASD." The National Association of Securities Dealers, Inc.
"Person." An individual, a partnership, a corporation, a limited
liability company or partnership, an association, a joint stock company, a
trust, a business trust, a joint venture, an unincorporated organization or a
government entity or any department, agency, or political subdivision thereof.
"Piggyback Registration." As defined in Section 3(a) hereof.
"Registrable Securities." Any shares of Common Stock of the Company
acquired by the Stockholder pursuant to the Securities Purchase Agreement
between the Company and Stockholder, of even date herewith, and any securities
of the Company issued with respect thereto; provided, that a Registrable
Security ceases to be a Registrable Security when (i) it is registered under the
Securities Act or (ii) it is eligible to be sold or transferred under Rule 144
(or similar provisions then in effect) promulgated by the SEC under the
Securities Act ("Rule 144") and any lock-up agreements relating to such
Registrable Security have expired.
"Registration Expenses." As defined in Section 6(a) hereof.
"SEC." The United States Securities and Exchange Commission.
"Securities Act." The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
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Section 2 . Securities Subject to this Agreement. A Person is deemed to
be a holder of Registrable Securities whenever that Person owns, directly or
beneficially, Registrable Securities.
Section 3 . Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register
(including on behalf of a selling stockholder) any of its securities under the
Securities Act (except for the registration of securities to be offered pursuant
to an employee benefit plan registered on Form S-8 or to a registration made on
Form S-4 or any successor forms then in effect at any time and the registration
form to be used may be used for the registration of the Registrable Securities
(a "Piggyback Registration"), it will so notify the Stockholder in writing no
later than forty-five (45) days prior to the anticipated filing date. Subject to
the provisions of Section 3(c), the Company will include in the Piggyback
Registration all Registrable Securities with respect to which the Company has
received written request for inclusion from the Stockholder within fifteen (15)
business days after the Stockholder's receipt of the Company's notice. The
Stockholder may withdraw all or any part of the Registrable Securities from a
Piggyback Registration at any time before ten (10) business days prior to the
effective date of the Piggyback Registration. If the Piggyback Registration is
in connection with an underwritten offering, the Stockholder must sell its
securities in compliance with Section 9 hereof.
(b) Piggyback Expenses. The Company shall pay to the Stockholder all
Registration Expenses incurred by it (except to the extent prohibited by
applicable state securities laws).
(c) Priority on Piggyback Registrations. If the Piggyback Registration
is an underwritten offering and if the managing underwriter gives the Company
its written opinion that the total number or dollar amount of securities
requested to be included in the registration exceeds the number or dollar amount
of securities that can be sold, the Company will include the securities in the
registration in the following order of priority: (i) first, all securities the
Company or the holder for whom the Company is effecting the registration, as the
case may be, proposes to sell; and (ii) second, any other securities (provided
they are of the same class as the securities sold by the Company) requested to
be included, allocated pro rata among the holders of such securities on the
basis of the number of securities requested to be included. In the event that
the managing underwriter advises the Company that an underwriters'
over-allotment option is necessary or advisable, the preceding priority shall
apply to the determination of which securities are to be included in the primary
portion of such registration.
(d) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the Company will select the investment banker(s) and
manager(s) that will administer the offering. The Company and the Stockholder
shall enter into a customary underwriting agreement with such investment
banker(s) and manager(s).
Section 4 . Restrictions on Public Sale by the Stockholder.
The Stockholder agrees not to make any public sale or distribution of
equity securities of the Company (except as part of the underwritten
registration effected pursuant to a Piggyback
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Registration), including a sale pursuant to Rule 144, during such customary
period following the effective date of any underwritten Piggyback Registration
as any managing underwriter(s) of such underwriting may reasonably request.
Section 5 . Registration Procedures.
(a) Obligations of the Company. Whenever the Stockholder requests the
registration of any Registrable Securities pursuant to this Agreement, the
Company shall use its best efforts to register and to permit the sale of the
Registrable Securities in accordance with the intended method of disposition. To
carry out this obligation, the Company shall as expeditiously as practicable:
(1) prepare and file with the SEC a registration statement on
the appropriate form and use commercially reasonable efforts to cause
the registration statement to become effective;
(2) immediately notify the Stockholder of any stop order
threatened or issued by the SEC and take all actions reasonably required
to prevent the entry of a stop order or if entered to have it rescinded
or otherwise removed;
(3) prepare and file with the SEC such amendments and
supplements to the registration statement and the corresponding
prospectus necessary to keep the registration statement effective for
one-hundred eighty (180) days or such shorter period as may be required
to sell all Registrable Securities covered by the registration
statement; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the registration
statement during such period in accordance with the sellers' intended
methods of disposition as set forth in the registration statement;
(4) furnish to the Stockholder a sufficient number of copies of
the registration statement, each amendment and supplement thereto (in
each case including all exhibits), the corresponding prospectus
(including each preliminary prospectus), and such other documents as the
Stockholder may reasonably request to facilitate the disposition of the
Registrable Securities;
(5) use its best efforts to register or qualify the Registrable
Securities under securities or blue sky laws of jurisdictions in the
United States of America as the Stockholder requests and do any and all
other reasonable acts and things that may be necessary or advisable to
enable the Stockholder to consummate the disposition of the Registrable
Securities in such jurisdiction; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then
qualified or to file any general consent to service of process;
(6) notify the Stockholder, at any time when a prospectus is
required to be delivered under the Securities Act, of any event as a
result of which the prospectus or any document incorporated therein by
reference contains an untrue statement of a material
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fact or omits to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under
which such statements were made, and prepare a supplement or amendment
to the prospectus or any such document incorporated therein so that
thereafter the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under
which such statements were made;
(7) cause all registered Registrable Securities to be listed on
each securities exchange, if any, on which similar securities issued by
the Company are then listed;
(8) provide an institutional transfer agent and registrar and a
CUSIP number for all Registrable Securities on or before the effective
date of the registration statement;
(9) enter into such customary agreements (including an
underwriting agreement in customary form) and take all other actions in
connection with those agreements as the Stockholder or the underwriters,
if any, reasonably request to expedite or facilitate the disposition of
the Registrable Securities;
(10) make available for inspection by the Stockholder, any
underwriter participating in any disposition pursuant to the
registration statement, and any attorney, accountant, or other agent of
any underwriter, all financial and other records, pertinent corporate
documents, and properties of the Company, and cause the Company's
officers, directors and employees to supply all information requested by
any underwriter or its attorneys, accountants, or other agents in
connection with the registration statement; provided that an appropriate
and customary confidentiality agreement is executed by any such
underwriter, attorney, accountant or other agent;
(11) in connection with any underwritten offering, obtain a
"comfort" letter from the Company's independent public accountants in
customary form and covering those matters customarily covered by
"comfort" letters as the managing underwriter reasonably requests;
(12) in connection with any underwritten offering, furnish an
opinion of counsel representing the Company for the purposes of the
registration, in the form and substance customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to counsel representing the underwriter(s) of the offering,
addressed to the underwriters;
(13) use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders,
as soon as reasonably practicable, an earnings statement complying with
the provisions of Section 11(a) of the Securities Act and covering the
period of at least twelve (12) months, but not more than eighteen (18)
months, beginning with the first month after the effective date of the
Registration Statement;
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(14) cooperate with the Stockholder and each underwriter
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD; and
(15) in connection with any underwritten offering, send
appropriate officers of the Company to attend any "road shows" and
analysts presentations scheduled in connection with any such
registration and use reasonable efforts to co-operate in the marketing
of the Registerable Securities.
(16) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
(b) Stockholder Information. In the event of any registration by the
Company, from time to time, the Company may require the Stockholder to furnish
to the Company information regarding itself and the distribution of the
securities subject to the registration, and the Stockholder shall furnish all
such information reasonably requested by the Company.
(c) Notice to Discontinue. The Stockholder agrees that, upon receipt of
any notice from the Company of any event of the kind described in Section
5(a)(6), the Stockholder will discontinue disposition of Registrable Securities
until the Stockholder receives copies of the supplemented or amended prospectus
contemplated by Section 5(a)(6). In addition, if the Company requests, the
Stockholder will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in the holder's possession, of the
prospectus covering the Registrable Securities current at the time of receipt of
the notice. If the Company gives any such notice, the time period mentioned in
Section 5(a)(3) shall be extended by the number of days elapsing between the
date of notice and the date that the Stockholder receives the copies of the
supplemented or amended prospectus contemplated in Section 5(a)(6).
(d) Notice by Stockholder. Whenever the Stockholder has requested that
any Registrable Securities be registered pursuant to this Agreement, it shall
notify the Company, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event, which
as to the Stockholder is (i) to his or its respective knowledge, (ii) solely
within his or its respective knowledge and (iii) solely as to matters concerning
that the Stockholder, as a result of which the prospectus included in the
registration statement contains an untrue statement of a material fact or omits
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 6 . Registration Expenses.
(a) Generally. All Registration Expenses incident to the Company's
performance of or compliance with this Agreement shall be paid as provided in
this Agreement. The term "Registration Expenses" includes without limitation all
registration filing fees, reasonable professional fees and other reasonable
expenses of the Company's compliance with federal, state and other securities
laws (including fees and disbursements of counsel for the underwriters in
connection with state or other securities law qualifications and registrations),
printing expenses,
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messenger, telephone and delivery expenses; reasonable fees and disbursements of
counsel for the Company; reasonable fees and disbursement of all independent
certified public accountants employed by the Company in connection with the
registration of Registrable Securities (including the expenses of any audit or
"comfort" letters required by or incident to performance of the obligations
contemplated by this Agreement); fees and expenses of the underwriters engaged
by the Company (excluding discounts and commissions); fees and expenses of any
special experts retained by the Company at the request of the managing
underwriters in connection with the registration; and applicable stock exchange
and NASD registration and filing fees. The term "Registration Expenses" does not
include the Company's internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed, all of which shall be paid by the Company, nor does it include
underwriting fees or commissions or transfer taxes or fees and expenses of
counsel retained by the Stockholder, all of which shall be paid by the
Stockholder.
(b) Other Expenses. To the extent the Company is not required to pay
Registration Expenses, the Stockholder will pay those Registration Expenses
allocable to the Stockholder's securities so included, and any Registration
Expenses not allocable will be borne by all sellers in proportion to the number
of securities each registers.
Section 7 . Indemnification.
(a) Indemnification by Company. In the event of any registration of
Registrable Securities under the Securities Act pursuant to this Agreement, to
the full extent permitted by law, the Company agrees to indemnify the
Stockholder, its officers, directors, trustees, partners, employees, advisors
and agents, and each Person who controls the Stockholder (within the meaning of
the Securities Act and the Exchange Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or allegedly untrue statement of
material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, any prospectus
or preliminary prospectus contained therein or any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which such
statements were made, except to the extent the untrue or allegedly untrue
statement or omission or alleged omission resulted from information that the
holder furnished in writing to the Company expressly for use therein. In
connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, the Company will indemnify the
underwriters, their officers and directors and each Person who controls the
underwriters (within the meaning of the Securities Act and the Exchange Act), to
the extent customary in such agreements.
(b) Indemnification by the Stockholder. In connection with any
registration statement, the Stockholder will furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any registration statement or prospectus and the Stockholder
agrees to indemnify, to the extent permitted by law,
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the Company, its directors, officers, trustees, partners, employees, advisors
and agents, and each Person who controls the Company (within the meaning of the
Securities Act and the Exchange Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or allegedly untrue statement
of a material fact or any omission or alleged omission to state a material fact
required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto necessary to make the statements therein
not misleading in light of the circumstances under which such statements were
made, but only to the extent that the untrue or allegedly untrue statement or
omission or alleged omission is contained in or omitted from any information the
Stockholder furnished in writing to the Company expressly for use therein and
only in an amount not exceeding the net proceeds received by the holder with
respect to securities sold pursuant to such registration statement. In
connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, the Stockholder will indemnify
the underwriters, their officers and directors and each Person who controls the
underwriters (within the meaning of the Securities Act and the Exchange Act), to
the extent customary in such agreements.
(c) Indemnification Proceedings. Any Person entitled to indemnification
under this Agreement will (i) give prompt notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (ii) unless in the
indemnified party's reasonable judgment a conflict of interest may exist between
the indemnified and indemnifying parties with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party does not assume
the defense, the indemnifying party will not be liable for any settlement made
without its consent (but that consent may not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or will enter into any
settlement that does not include as an unconditional term thereof the claimant's
or plaintiff's release of the indemnified party from all liability concerning
the claim or litigation. An indemnifying party who is not entitled to or elects
not to assume the defense of a claim will not be under an obligation to pay the
fees and expenses of more than one counsel for all parties indemnified by the
indemnifying party with respect to the claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between the
indemnified party and any other indemnified party with respect to the claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of no more than one additional counsel for the indemnified parties.
(d) Contribution. If the indemnification provided for in Section 7(a) or
(b) is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying
party thereunder shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Company and the Stockholder in connection with the statements or omissions
that resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Stockholder shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Stockholder and the parties' relative intent
and knowledge.
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The parties hereto agree that it would not be just and equitable if
contribution pursuant this Section 7(d) were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding anything herein to the contrary, the Stockholder shall not be
required to contribute any amount in excess of the amount by which the net
proceeds of the offering (before deducting expenses, if any) received by the
Stockholder exceeds the amount of any damages that the Stockholder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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.
Section 8 . Rule 144. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder, and it will take
such further action as the Stockholder reasonably may request, all to the extent
required from time to time, to enable such holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of the
Stockholder, the Company will deliver to the Stockholder a written statement as
to whether it has complied with Rule 144's or any successor rule's requirements.
The Company also covenants that in such event it will provide all such
information and it will take such further action as the Stockholder reasonably
may request to enable the Stockholder to sell Registrable Securities without
registration under the Securities Act within the limitation of Rule 144 under
the Securities Act or any successor rule requirements.
Section 9 . Participation in Underwritten Registration. The Stockholder
may not participate in any underwritten registration without (a) agreeing to
sell securities on the basis provided in underwriting arrangements approved by
the Company and (b) completing and executing all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required by
the underwriting arrangements.
Section 10. Miscellaneous.
(a) Recapitalizations, Exchanges, etc. The provisions of this Agreement
shall apply to the full extent set forth herein with respect to (i) the shares
of Common Stock held by the Stockholder, (ii) any and all shares of voting
common stock of the Company into which the shares of such Common Stock are
converted, exchanged or substituted in any recapitalization or other capital
reorganization by the Company and (iii) any and all equity securities of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in conversion of, in exchange for or in substitution of, such shares of Common
Stock and shall be appropriately adjusted for any stock dividends, splits,
reverse splits, combinations, recapitalizations and the like occurring after the
date hereof.
(b) Amendment. This Agreement may be amended or modified only by a
written agreement executed by the Company and the Stockholder.
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(c) Attorneys' Fees. In any legal action or proceeding brought to
enforce any provision of this Agreement, the prevailing party shall be entitled
to recover all reasonable expenses, charges, court costs and attorneys' fees in
addition to any other available remedy at law or in equity.
(d) Benefit of Parties; Assignment. All of the terms and provisions of
this Agreement shall be binding on and inure to the benefit of the parties and
their respective successors and assigns, including without limitation all
subsequent holders of securities entitled to the benefits of this Agreement who
agree in writing to become bound by the terms of this Agreement.
(e) Captions. The captions of the sections and subsections of this
Agreement are solely for convenient reference and shall not be deemed to affect
the meaning or interpretation of any provision of this Agreement.
(f) Cooperation. The parties agree that after execution of this
Agreement they will from time to time, upon the request of any other party and
without further consideration, execute, acknowledge and deliver in proper form
any further instruments and take such other action as any other party may
reasonably require to carry out effectively the intent of this Agreement.
(g) Counterparts; Facsimile Execution. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Facsimile execution and delivery of this Agreement shall be legal, valid and
binding execution and delivery for all purposes.
(h) Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings between the parties with
respect thereto. There are no promises, covenants or undertakings other than
those expressly set forth or provided for in this Agreement.
(i) Governing Law. The internal law of the State of New York will govern
the interpretation, construction, and enforcement of this Agreement and all
transactions and agreements contemplated hereby, notwithstanding any state's
choice of law rules to the contrary.
(j) Notices. All notices, requests, demands, or other communications
that are required or may be given pursuant to the terms of this Agreement shall
be in writing and delivery shall be deemed sufficient in all respects and to
have been duly given on the date of service if delivered personally to the party
to whom notice is to be given, or upon receipt if mailed by first class mail,
return receipt requested, postage prepaid, and properly addressed to the
addresses of the parties set forth in the Purchase Agreement or to such other
address(es) as the respective parties hereto shall from time to time designate
to the other(s) in writing.
(k) Specific Performance. Each of the parties agrees that damages for a
breach of or default under this Agreement would be inadequate and that in
addition to all other remedies available at law or in equity that the parties
and their successors and assigns shall be entitled to specific performance or
injunctive relief, or both, in the event of a breach or a threatened breach of
this Agreement.
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(l) Validity of Provisions. Should any part of this Agreement for any
reason be declared by any court of competent jurisdiction to be invalid, that
decision shall not affect the validity of the remaining portion, which shall
continue in full force and effect as if this Agreement had been executed with
the invalid portion eliminated, it being the intent of the parties that they
would have executed the remaining portion of the Agreement without including any
part or portion that may for any reason be declared invalid.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FUTURELINK CORP.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
CPQ HOLDINGS, INC.
By: /s/
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Name:
Title:
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