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EXHIBIT 4.2
WEBGAIN, INC.
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT,
dated as of February 21, 2001 (this "Agreement"), by and among WebGain, Inc., a
Delaware corporation (the "Company"), and the investors listed on Schedule A
hereto (the "Investors").
RECITALS
WHEREAS, BEA Systems, Inc., a Delaware corporation ("BEA"), WPEP
Finance, L.P., a Delaware limited partnership ("WPEP Finance"), and WP Equity
Partners, Inc., a Delaware corporation "("WPEP"), hold shares of the Company's
Series A Preferred Stock (the "Series A Preferred Stock") and/or shares of the
Company's Class A Common Stock ("Common Stock") issued upon conversion thereof,
Warburg, ▇▇▇▇▇▇ Ventures, L.P., a Delaware limited partnership ("WP Ventures"),
and Warburg, ▇▇▇▇▇▇ Equity Partners, L.P., a Delaware limited partnership ("WP
Equity"), hold shares of Common Stock (BEA, WPEP Finance, WPEP, WP Ventures and
WP Equity referred to herein as the "Original Investors") and certain of the
Original Investors possess registration rights and other rights pursuant to that
certain Registration Rights Agreement dated as of December 29, 1999, among the
Company and certain of the Original Investors (the "Original Agreement");
WHEREAS, the Company and certain investors (the "ZAT Shareholders"
and, with the Original Investors, the "Prior Investors") are parties to that
certain Agreement and Plan of Merger dated as of June 7, 2000 (the "Merger
Agreement"), by and among the Company, ZAT, Inc., an Oregon corporation ("ZAT"),
Acquisition Subsidiary, a wholly-owned subsidiary of the Company (the
"Acquisition Subsidiary"), and the ZAT Shareholders pursuant to which ZAT was
merged with and into Acquisition Subsidiary (the "Merger");
WHEREAS, in connection with the Merger, the Company and the Original
Investors amended and restated the Original Agreement on June 7, 2000 (such
amended and restated agreement, the "Prior Agreement"), so as to provide the ZAT
Shareholders with registration rights and other rights with respect to the
shares of Class A Common Stock of the Company held by such ZAT Shareholders;
WHEREAS, concurrently herewith, the Company, Intel Corporation, a
Delaware corporation ("Intel"), and Hewlett-Packard Company, a Delaware
corporation ("HP" and, with Intel, the "Series B Investors") are entering into
that certain Series B Preferred Stock Purchase Agreement dated as of February
20, 2001 (the "Series B Purchase Agreement"), pursuant to which the Company will
sell to such Series B Investors, and such Series B Investors will purchase from
the Company, shares of the Series B Preferred Stock of the Company (the "Series
B Preferred"), and, as condition to the Series B Investors' obligations under
the Series B Purchase Agreement, the Company has agreed to grant certain
registration rights and other rights as provided herein with respect to the
shares of Series B Preferred;
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WHEREAS, pursuant to Section 3(g) of the Prior Agreement, such Prior
Agreement may be amended with the written consent of the Company and the Holders
of a majority of the Registrable Securities then outstanding (as such terms are
defined therein), which written consent is evidenced by the signatures of the
Company and certain Investors on the signature pages of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
respective meaning set forth below:
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act;
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended;
"Holder" shall mean any holder of Registrable Securities;
"Initial Public Offering" shall mean the initial public offering of
shares of Common Stock pursuant to a registration under the Securities Act;
"Initiating Holder" shall mean any of ▇▇▇▇▇▇▇, ▇▇▇, Intel and HP,
provided that each of the foregoing shall cease to be an Initiating Holder for
the purposes of Section 2(a) after the Company has effected, pursuant to Section
2(a) hereof, (i) one (1) registration at the request of BEA,(ii) one (1)
registration at the request of Intel, (iii) one (1) registration at the request
of HP, and (iv) two (2) registrations at the request of Warburg.
"Person" shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
"register," "registered" and "registration" shall mean to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
"Registrable Securities" shall mean each of the following: (A)
shares of Common Stock issuable upon conversion of the shares of Series A
Preferred Stock or Series B Preferred Stock; (B) any additional shares of Common
Stock acquired by the Original Investors or the Series B Investors; (C) shares
of Common Stock issued to ZAT Shareholders in the Merger (including the
Antidilution Adjustment Shares (as defined in the Merger Agreement)), provided
that such shares of Common Stock held by the ZAT Shareholders shall not be
deemed Registrable Securities and the ZAT Shareholders shall not be deemed
Holders for the purposes of Sections 2(a) and 2(c); and (D) any stock of the
Company issued as a dividend or other
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distribution ("Dividends") with respect to, or in exchange for or in replacement
of, the shares of Series A Preferred Stock, Series B Preferred Stock or Common
Stock referred to in clause (A) or (B) or (C), provided that any Dividends
received with respect to, or in exchange or in replacement of, the shares of
Common Stock held by ZAT Shareholders shall be subject to the same limitations
as set forth in clause (C) above.
"Registration Expenses" shall mean all expenses incurred by the
Company in compliance with Sections 2(a) and (b) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders in an amount not to exceed $15,000, blue sky fees and expenses
and the expense of any special audits incident to or required by ally such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
"Security," and "Securities" shall have the meaning set forth in
Section 2(l) of the Securities Act,
"Securities Act" shall mean the Securities Act of 1933, as amended;
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
expenses of counsel for each of the Holders, other than fees and expenses of one
counsel for all the Holders in an amount not to exceed $15,000; and
"Warburg" shall mean Warburg Pincus & Co., a New York general
partnership, and any entities it beneficially owns within the definition of Rule
13d--3 of the Exchange Act.
2. Registration Rights.
(a) Requested Registration.
(i) Request for Registration. If, at any time commencing six (6)
months following the Initial Public Offering, the Company shall receive from an
Initiating Holder, at any time, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:
(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act) 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 as are specified in a written request received
by the Company within ten (10) business days after written notice from the
Company is given under Section 2(a)(1)(A) above; provided,
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however, that the Company shall not be obligated to effect, or take any action
to effect, any such registration pursuant to this Section 2(a):
(1) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except as
may be required by the Securities Act or applicable rules or regulations
thereunder;
(2) If the Registrable Securities requested by all
Holders to be registered pursuant to such request do not have an
anticipated aggregate public offering price (before any underwriting
discounts and commissions) of not less than $15,000,000;
(3) During the period beginning on the date the Company
commences a public offering and ending on a date 180 days after the
effective date of such registration;
(4) If the Initiating Holder proposes to dispose of
shares of Registrable Securities that may be immediately registered on
Form S-3 pursuant to a request made pursuant to Section 2(c) in which
case such request shall be deemed given pursuant to such Section 2(c);
or
(5) If, within thirty (30) days of the request by the
Initiating Holder, the Company notifies the Initiating Holder in good
faith of its intent to file a registration statement (other than a
registration relating solely to employee benefit plans, or a
registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities) within the next ninety (90) days, provided that
the Company uses its reasonable best efforts to effect such registration
and complies with the applicable provisions of this Agreement with
respect thereto.
Notwithstanding the foregoing, if the Company shall furnish to the Initiating
Holders, a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement. The Company shall have the
right to defer taking action with respect to such filing for a period of not
more than ninety (90) days after receipt of the request of the Initiating
Holders; provided, however, that the Company may not utilize this right more
than once in any twelve (12)-month period; provided, further, that the Company
may not utilize this right following the exercise of its right under subsection
(a)(i)(A)(5) hereof until either the Company has completed its filing
obligations or the Initiating Holders have withdrawn their request.
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The registration statement filed pursuant to the request of the Initiating
Holders may, so long as such request is an underwritten offering, subject to the
provisions of Section 2(a)(ii) below, include other securities of the Company
which are held by Persons who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration (the "Other
Stockholders"). The registration rights set forth in this Section 2 may be
assigned, in whole or in part, to any transferee of Registrable Securities (who
shall be bound by all obligations of this Agreement).
(ii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 2(a). If any Other Stockholders request such inclusion, the
Holders shall offer to include the securities of such Other Stockholders in the
underwriting, subject to the allocations described herein, and may condition
such offer on their acceptance of the further applicable provisions of this
Section 2. The Holders whose shares are to be included in such registration and
the Company shall (together with all Other Stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders and reasonably
acceptable to the Company. Notwithstanding any other provision of this Section
2(a), if the representative advises the Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, and (x)
if such registration is the Initial Public Offering, the representative may
(subject to the allocation priority set forth below) exclude from such
registration and underwriting some or all of the Registrable Securities which
would otherwise be underwritten pursuant hereto, and (y) if such registration is
other than the Initial Public Offering, the representative may (subject to the
allocation priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting to not less than twenty five
percent (25%) of the shares requested for inclusion therein (based on the number
of shares). The Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated in the
following manner: the securities of the Company held by officers, directors and
Other Stockholders of the Company (other than Registrable Securities held by
holders who by contractual right demanded such registration or elected to
participate within the required period ("Demanding Holders")) shall first be
excluded from such registration and underwriting to the extent required by such
limitation, and, if a limitation on the number of shares is still required, the
remaining number of shares that may be included in the registration and
underwriting by each of the Holders and Demanding Holders shall be reduced, on a
pro rata basis (based on the number of shares held by such Holders and Demanding
Holders), by such minimum number of shares as is necessary to comply with such
limitation. If any of the Holders or any officer, director or Other Stockholder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration. Notwithstanding the foregoing, the
number of shares of Registrable Securities to be included in such underwriting
shall not be reduced unless any securities of the Company to be included therein
have first been excluded in their entirety.
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(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of Other Stockholders
(other than a registration relating solely to employee benefit plans, or a
registration relating solely to a Commission Rule 145 transaction, or a
registration on any registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities), the Company will:
(A) at least twenty (20) days prior to the filing date, give
to each of the Holders a written notice thereof (which shall include a list of
the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by the Holders within fifteen (15) days after receipt of the
written notice from the Company described in clause (i) above, except as set
forth in Section 2(b)(ii) below. Such written request may specify all or a part
of the Holders' Registrable Securities.
(ii) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(A). In such event, the right of each of the
Holders to registration pursuant to this Section 2(b) shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 2(b), if the representative advises the Holders in writing that
marketing factors require a limitation on the number of shares to be
underwritten, and (x) if such registration is the Initial Public Offering, the
representative may (subject to the allocation priority set forth below) exclude
from such registration and underwriting some or all of the Registrable
Securities which would otherwise be underwritten pursuant hereto, and (y) if
such registration is other than the Initial Public Offering, the representative
may (subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration and underwriting to
not less than twenty five percent (25%) of the shares included therein (based on
the number of shares). The Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner: the securities of the Company held by officers,
directors and Other Stockholders of the Company (other than Registrable
Securities and other than securities held by the Demanding Holders who by
contractual right demanded such registration) shall first be excluded from such
registration and underwriting to the extent required by such limitation, and, if
a limitation on the number of shares is still required, the remaining
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number of shares that may be included in the registration and underwriting by
each of the Holders and Demanding Holders shall be reduced, on a pro rata basis
(based on the number of shares held by such Holders and Demanding Holders), by
such minimum number of shares as is necessary to comply with such limitation. If
any of the Holders or any officer, director or Other Stockholder disapproves of
the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.
(c) Form S-3. Following the Initial Public Offering, the Company
shall use its best efforts to qualify for registration on Form S-3 for secondary
sales. After the Company has qualified for the use of Form S-3, the Holders
shall have the right to request unlimited registrations on Form S-3 (such
requests shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and the intended method of disposition of shares by
such holders), subject only to the following:
(i) The Company shall not be required to effect a registration
pursuant to this Section 2(c) unless the Holder or Holders requesting
registration propose to dispose of shares of Registrable Securities having an
aggregate price to the public (before deduction of underwriting discounts and
expenses of sale) of more than $5,000,000;
(ii) The Company shall not be required to effect a registration
pursuant to this Section 2(c) within 180 days of the effective date of the most
recent registration pursuant to this Section 2 in which securities held by the
requesting Holder could have been included for sale or distribution if such
Holder had so requested such inclusion and was included without cutback, subject
to the terms hereof;
(iii) The Company shall not be obligated to effect any
registration pursuant to this Section 2(c) in any particular jurisdiction in
which the Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder;
(iv) if Form S-3 is not available for such offering;
(v) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two (2) registrations on
Form S-3 for the Holders pursuant to this Section 2(c); or
(vi) If the Company shall furnish to the Holders a certificate
signed by the Chief Executive officer of the Company stating that in the good
faith of the Board of Directors of the Company it would be seriously detrimental
to the Company and its stockholders for such Form S-3 registration to be
effected at such time, in which event the Company shall have the right to defer
the filing of the Form S-3 registration statement for a period of not more than
ninety (90) days after receipt of the request of the Holder or Holders under
this Section 2(c); provided, however, that the Company shall not utilize this
right more than once in any twelve (12)-month period.
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The Company shall give written notice to all Holders of the receipt of a request
for registration pursuant to this Section 2(c) and shall provide a reasonable
opportunity for other Holders to participate in the registration; provided,
however, that if the registration is for an underwritten offering, the terms of
Section 2(a)(ii) shall apply to all participants in such offering. Subject to
the foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition.
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered.
(e) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will,
as expeditiously as reasonably possible:
(i) prepare and file with the SEC a registration statement,
including any amendments thereto necessary to ensure compliance with the
Securities Act, keep such registration effective for a period of one hundred
twenty (120) days or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; provided, however, that (A) such 120-day period shall be extended
for a period of time equal to the period during which the Holders, as
applicable, refrain from selling any securities included in such registration in
accordance with provisions in Section 2(i) hereof, and (B) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 120-day period shall be extended
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous or
delayed basis; provided, further, that applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (y) includes any prospectus required by
Section 10(a) of the Securities Act or (z) reflects facts or events representing
a material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information required
to be included in (y) and (z) above to be contained in periodic reports filed
pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement;
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time may
reasonably request;
(iii) notify each Holder of Registrable Securities covered by
such registration 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;
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(iv) use reasonable, diligent efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as will be reasonably
requested by the Holders, provided that the Company will not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
(v) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;
(vi) 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;
(vii) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration; and
(viii) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (1) 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 and reasonably satisfactory to a majority in interest of the Holders
participating in such registration, addressed to the underwriters, if any, and
to the Holders participating in such registration and (2) 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 and reasonably
satisfactory to a majority in interest of the Holders participating in such
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders participating in such
registration.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each person
controlling each of the Holders, with respect to each registration which has
been effected pursuant to this Section 2, and each underwriter, if any, and each
person who controls any underwriter, 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 prospectus, offering circular or other document (including any related
registration statement, notification or the like) 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 or the Exchange Act or any rule or regulation
thereunder 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 of the Holders, each of its officers,
directors
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and partners, and each person controlling each of the Holders, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action; provided, however,
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 based upon written information furnished to the
Company by the Holders or underwriter and stated to be specifically for use
therein.
(ii) Each of the Holders will, if Registrable Securities held by
it 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 each underwriter, if any, of the Company's securities covered
by such a registration statement, each person who controls the Company or such
underwriter, each Other Stockholder and each of their officers, directors, and
partners, and each person controlling such Other Stockholder 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 made by such Holder, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements by such Holder therein not misleading, and will reimburse the
Company and such Other Stockholders, directors, officers, partners, persons,
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 and stated to be specifically for use
therein; provided, however, that the obligations of each of the Holders
hereunder shall be limited to all amount equal to the net proceeds to such
Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(f) (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, however, that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, 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 (unless the
Indemnified Party shall have reasonably concluded that there may be a conflict
of interest between the Indemnifying Party and the Indemnified Party in such
action, in which case the fees and expenses of counsel shall be at the expense
of the Indemnifying Party); provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information
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regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) 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
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall 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 which 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 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 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.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder if a copy of the Final Prospectus was
furnished to the underwriter and 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.
(g) Information by the Holders.
(i) Each of the Holders holding securities 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 reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Section 2.
(ii) In the event that, either immediately prior to or
subsequent to the effectiveness of any registration statement, any Holder shall
distribute Registrable Securities to its partners, such Holder shall so advise
the Company and provide such information as shall be necessary to permit an
amendment to such registration statement to provide information with
11
12
respect to such partners, as selling security holders. Promptly following
receipt of such information, the Company shall file an appropriate amendment to
such registration statement reflecting the information so provided. Any
incremental expense to the Company resulting from such amendment shall be borne
by such Holder.
(h) Exchange Act Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of restricted securities to the public without registration, the Company
agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act ("Rule 144"), at
all times from and after ninety (90) days following the effective date of the
Initial Public Offering;
(ii) 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;
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from and
after ninety (90) days following the effective date of the Initial Public
Offering), and of the Securities Act and the Exchange Act (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
so filed as the Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any such securities
without registration; and
(iv) take such action, including the voluntary registration of
the Common Stock under Section 12 of the Exchange Act, as is reasonably
necessary to enable the Holders to utilize Form S-3, such action to be taken as
soon as reasonably practicable after the end of the fiscal year in which the
registration statement relating to the Initial Public Offering is declared
effective.
(i) "Market Stand-off" Agreement. Each of the Holders agrees, if
requested by the Company and an underwriter of equity securities of the Company,
not to sell or otherwise transfer or dispose of any Registrable Securities held
by such Holder during the 180-day period following the effective date of a
registration statement of the Company filed under the Securities Act, provided
that (i) such agreement only applies to the Initial Public Offering, and (ii)
all officers and directors of the Company and holders of at least five percent
(5%) of the capital stock of the Company enter into similar agreements. If
requested by the underwriters, the Holders shall execute a separate agreement to
the foregoing effect. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 180-day period. The provisions of this Section 2(i) shall be
binding upon any transferee who acquires Registrable Securities. The
underwriters in connection with the initial public offering of the Company's
securities are intended third party beneficiaries of this Section 2(i) and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto. In order to enforce the foregoing covenant, the
Company will have the right to place restrictive legends on the certificates
representing the
12
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shares subject to this Section and to impose stop transfer instructions with
respect to the Registrable Securities and such other shares of stock of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
(j) Termination. The Company will have no obligations pursuant to
Sections 2(a), 2(b) and 2(c) hereof with respect to any Registrable Securities
proposed to be sold by a Holder in a registration pursuant to Section 2(a), 2(b)
or 2(c) hereof if, in the written opinion of counsel to the Company as provided
to such holder, all such Registrable Securities proposed to be sold by a Holder
may be sold in a three-month period without registration under the Securities
Act pursuant to Rule 144 under the Securities Act (without giving effect to the
provisions of Rule 144(k)).
(k) Transfer of Registration Rights. The rights to cause the Company
to register securities granted to a Holder by the Company under Sections 2(a),
2(b) and 2(c) may be transferred or assigned by a Holder only to a transferee or
assignee who, after such transfer, holds not less than 100,000 shares of
Registrable Securities (as adjusted for any stock splits, stock dividends,
reverse stock splits and the like); provided, however, that the Company is given
written notice at the time of or within a reasonable time after said transfer or
assignment, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and provided further that the transferee or
assignee of such rights assumes the obligations of such Holder under this
Section 2.
3. Miscellaneous.
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to contracts
made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices. All notices, requests, consents and other
communications hereunder to any party will be deemed to be sufficient if
contained in a written instrument delivered in person, including overnight
delivery by recognized express courier, fees prepaid, or sent by facsimile
transmission, in each case addressed as follows:
If to the Company: WebGain, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
13
14
With a copy to: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
One Market -- Spear Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
If to an Investor: To the address set forth on Schedule A hereto
All such notices, requests, consents and other communications will be deemed to
have been received in the case of personal delivery, including delivery by
express courier, on the date of such delivery; in the case of facsimile
transmission, on the date of transmission; and in the case of mailing, on the
third day after deposit in the U.S. mail, proper postage prepaid.
(e) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Holders
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Holders may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Holders in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties including, without limitation, the Prior
Agreement. This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with (and only with) the written consent of the Company
and the Holders holding a majority of the then outstanding Registrable
Securities; provided, however, that Section 2(b) shall not be amended such that
the ZAT Shareholders are significantly, discriminatorily and adversely affected
in a manner disproportionately to the other Holders. Notwithstanding the
foregoing, no amendment or waiver of any provision of this Agreement that
adversely affects any Holder or Holders but does not so adversely affect all
Holders shall be effective unless such amendment or waiver is approved by, in
addition to the Company and the Investors as described above, each Holder or
Holders so adversely affected.
(h) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.
14
15
(i) Counterparts. This Agreement may be executed in one or more
Counterparts, including counterparts transmitted by facsimile, each of which
shall be deemed an original and all of which together shall be considered one
and the same agreement.
(This space intentionally left blank)
15
16
IN WITNESS WHEREOF, the undersigned have executed this Second Amended
and Restated Registration Rights Agreement as of the date first set forth above.
"COMPANY" "AMENDING INVESTORS"
WEBGAIN, INC., a Delaware WARBURG, ▇▇▇▇▇▇ VENTURES, L.P.
corporation
By: Warburg, ▇▇▇▇▇▇ & Co.,
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------- -------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name:
-------------------------------------
Title: Chief Financial Officer Title:
-------------------------------------
WARBURG, ▇▇▇▇▇▇ EQUITY PARTNERS, L.P.
By: Warburg, ▇▇▇▇▇▇ & Co.,
General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
WP EQUITY PARTNERS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
BEA SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Executive Vice President and Chief
Financial Officer
-------------------------------------
17
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇ ▇▇▇▇
THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1996 REVOCABLE TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: Trustee
-------------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
18
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
19
WPEP FINANCE, L.P.
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
"SERIES B INVESTORS"
INTEL CORPORATION, a Delaware corporation
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
HEWLETT-PACKARD COMPANY, a Delaware
corporation
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
20
SCHEDULE A
List of Investors
-----------------
NAME/ADDRESS TYPE OF STOCK NUMBER OF SHARES
------------ ------------- ----------------
ORIGINAL INVESTORS
Warburg, ▇▇▇▇▇▇ Ventures, L.P. Class A Common Stock 6,304,806
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Warburg, ▇▇▇▇▇▇ Equity Partners, L.P. Class A Common Stock 15,779,686
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
WPEP Finance, L.P. Series A Preferred Stock 6,000,269
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
WP Equity Partners, Inc. Series A Preferred Stock 580,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BEA Systems, Inc. Series A Preferred Stock 5,657,232
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
ZAT SHAREHOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Class A Common Stock 1,294,449
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Class A Common Stock 531,107
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ #▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Class A Common Stock 5,127
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ Class A Common Stock 156,381
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE A-1
21
▇▇▇ ▇▇▇▇ Class A Common Stock 307,705
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1996 Revocable Class A Common Stock 107,977
Trust Dtd. 11/19/96
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Class A Common Stock 38,564
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ Class A Common Stock 61,700
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Class A Common Stock 14,753
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Class A Common Stock 2,950
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Class A Common Stock 7,376
▇ ▇▇▇▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ Class A Common Stock 2,950
▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SERIES B INVESTORS
Intel Corporation Series B Preferred Stock 1,468,429
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Intel Capital Portfolio
Manager
with a copy by email to:
▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Hewlett-Packard Company Series B Preferred Stock 1,468,429
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (___) ____-______
Attention: General Counsel
with a copy to:
Corporate Development,
Portfolio Manager
SCHEDULE A-2