EXHIBIT 1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") dated as of July 26, 2000,
between Digital Lava Inc., a Delaware corporation (the "COMPANY"), and each of
the Persons who have executed this Agreement and are named in Annex A hereto
(each, an "INVESTOR" and, collectively, the "INVESTORS").
Execution and delivery of this Agreement by the parties hereto are
conditions to each Investor purchasing Shares (as defined below) from the
Company under the Subscription Agreement (as defined below). Accordingly, the
parties hereto hereby agree as follows:
1. DEFINITIONS. Unless the context otherwise requires, the terms defined
in this Section 1 have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of such terms:
"BOARD" means the Board of Directors of the Company.
"CLOSING DATE" has the meaning given in the Subscription Agreement;
PROVIDED that if there is more than one Closing Date pursuant to the
Subscription Agreement, this term shall refer to the latest such Closing Date.
"COMMON STOCK" means the common stock, par value $.0001 per share, of the
Company.
"COMMISSION" means the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" means the record owner of Registrable Securities.
"HOLDERS OF A MAJORITY OF THE REGISTRABLE SECURITIES" means the Person or
Persons who are the Holders of at least two-thirds of the Registrable Securities
then outstanding.
"PERSON" means any natural person, corporation, trust, association, limited
liability company, partnership, joint venture or other entity and any
government, governmental agency, instrumentality or political subdivision.
"REGISTER", "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
"REGISTRABLE SECURITIES" means the Shares if and so long as (i) they have
not been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction; or (ii) they have not been sold
in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect to such Shares are
removed upon the consummation of such sale; or (iii) they could not be sold in
any 90-day period pursuant to Rule 144 promulgated under the Securities Act.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Common Stock sold and issued to the Investors
pursuant to the Subscription Agreement.
"SUBSCRIPTION AGREEMENT" means one or more Subscription Agreements of even
date herewith between the Company and each Investor relating to the purchase and
sale of the Shares.
2. REQUIRED REGISTRATION
(a) Subject to the receipt of all necessary information from the
Investors, the Company shall prepare and file a registration statement on Form
S-3 under the Securities Act covering the Registrable Securities (the
"REGISTRATION STATEMENT"), on or before the date that is sixty (60) days after
the Closing Date (the "FILING DATE"), and shall use its commercially reasonable
efforts to cause such Registration Statement to become effective within one
hundred twenty (120) days after the Closing Date (the "EFFECTIVENESS DATE").
(b) If the Registration Statement is not filed on or prior to the
Filing Date or declared effective on or prior to the Effectiveness Date, then at
the end of each 30-day period subsequent to the Filing Date or the Effectiveness
Date, as the case may be, during which the Registration Statement has not been
so filed or declared effective (a "DELAY PERIOD"), up to the date of the first
anniversary of the Closing Date (the "ANNIVERSARY DATE"), each Investor shall
have the right with respect to each Delay Period to purchase, at a price equal
to $.0001 per share (the "ADDITIONAL SHARE PRICE"), an additional number of
shares of Common Stock ("ADDITIONAL SHARES") equal to 2% of the number of Shares
purchased by such Investor as set forth on Annex A, rounded to the nearest whole
number of Additional Shares. The Company shall promptly mail a written notice to
each Investor informing it of the number of Additional Shares that it is
entitled to purchase with respect to each Delay Period. The right of the
Investors to purchase Additional Shares shall expire on the 90th day following
the Anniversary Date. Each purchase of Additional Shares shall be subject to
delivery of the Additional Share Price and to the continuing accuracy of all of
the representations and warranties of each Investor set forth in the
Subscription Agreement.
(c) The Company shall use its commercially reasonable efforts to
maintain the effectiveness of the Registration Statement under the Securities
Act until the earliest of (i) the date that is two years after the Closing Date,
and (ii) the date on which all of the Registrable Securities have been sold
pursuant to the Registration Statement or no longer constitute Registrable
Securities.
(d) Notwithstanding the foregoing, if the Company is engaged in any
activity or transaction or preparations or negotiations for any activity or
transaction that the Company desires to keep confidential for business reasons
and the Company determines in good faith that the public disclosure requirements
imposed on the Company under the Securities Act in connection with a
registration hereunder would require disclosure of such activity, transaction,
preparation or negotiations and that such disclosure would be seriously
detrimental to the Company, the Company shall have the right, by written notice
to the Holders, (A) to withdraw a registration statement after filing and after
such notice, but prior to the effectiveness thereof, or
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(B) suspend the effectiveness thereof for a period not to exceed 60 days;
PROVIDED that such right may not be exercised more than once in any twelve-month
period.
3. PIGGY-BACK REGISTRATION
(a) Unless a registration statement has been filed pursuant to Section
2 hereof and such registration remains effective (subject to Section 2(d)
hereof) with respect to the Registrable Securities for the period set forth in
Section 2(c), each time the Company determines to file a registration statement
under the Securities Act (other than pursuant to Section 2 hereof and other than
a registration statement on Form S-4 or Form S-8 or a registration statement on
Form S-1 covering solely an employee benefit plan) in connection with the
proposed offer and sale for money of any of its securities, either for its own
account or on behalf of any other security holder, it will give prompt written
notice of its determination to all Holders of Registrable Securities. Upon the
written request of a Holder of Registrable Securities given within 20 days after
the receipt of such written notice, the Company will use commercially reasonable
efforts to cause all such Registrable Securities, the Holders of which have so
requested registration, to be included in such registration statement and
registered under the Securities Act, all to the extent requisite to permit the
sale or other disposition by the prospective seller or sellers of the
Registrable Securities to be so registered.
(b) If the registration of which the Company gives written notice
pursuant to Section 3(a) is for a public offering involving an underwriting, the
Company will so advise the Holders as a part of its written notice. In such
event, the right of any Holder to registration pursuant to this Section 3 is
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
with the underwriter or underwriters selected for such underwriting by the
Company, along with the Company and the other holders distributing their
securities through such underwriting; PROVIDED that such underwriting agreement
is in customary form and is reasonably acceptable to the Holders of a majority
of the Registrable Securities requesting to be included in such registration.
(c) Notwithstanding any other provision of this Section 3, if the
managing underwriter of an underwritten distribution advises the Company and the
Holders of the Registrable Securities participating in such registration in
writing that in its good faith judgment the number of shares of Registrable
Securities and the other securities requested to be registered exceeds the
number of shares of Registrable Securities and other securities which can be
sold in such offering, then (i) the number of shares of Registrable Securities
and other securities so requested to be included in the offering will be reduced
to that number of shares which in the good faith judgment of the managing
underwriter can be sold in such offering (except for shares to be issued by the
Company in an offering initiated by the Company, which will have priority over
the shares of Registrable Securities), and (ii), subject to existing priority
rights of the holders of such other securities, such reduced number of shares
will be allocated among all participating Holders of Registrable Securities and
the holders of other securities in proportion, as nearly as practicable, to the
respective number of shares of Registrable Securities and other securities held
by such Holders and other holders at the time of filing the registration
statement in relation to the total number of shares of Common Stock outstanding
on a fully diluted basis.
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All Registrable Securities which are excluded from the underwriting by reason of
the underwriter's marketing limitation and all other Registrable Securities not
originally requested to be so included will not be included in such registration
and will be withheld from the market by the Holders thereof for a period, not to
exceed 180 days, which the managing underwriter reasonably determines is
necessary to effect the underwritten public offering.
4. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Section 2 or 3 hereof to effect the registration of
Registrable Securities under the Securities Act, the Company will:
(a) In accordance with the Securities Act and all applicable rules and
regulations thereunder, prepare and file with the Commission a registration
statement with respect to such securities and use its commercially
reasonable efforts to cause such registration statement to become
effective, and use its commercially reasonable efforts to cause such
registration statement to remain effective (including preparing and filing
with the Commission such amendments and supplements to such registration
statement and the prospectus contained therein as may be necessary to keep
such registration statement effective) until the securities covered by such
registration statement have been sold or as otherwise set forth in Section
2;
(b) If the offering is to be underwritten in whole or in part, enter
into a customary written underwriting agreement in form and substance
reasonably satisfactory to the managing underwriter of the public offering,
the Company and the Holders of a Majority of the Registrable Securities
participating in such offering;
(c) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such number of copies
of the registration statement and each amendment and supplement thereto,
preliminary prospectus, final prospectus and such other documents as such
underwriters and Holders may reasonably request in order to facilitate the
public offering of such securities; PROVIDED, HOWEVER, that the obligation
of the Company to deliver copies of prospectuses or preliminary
prospectuses to any Holder shall be subject to the receipt by the Company
of reasonable assurances from such Holder that the Holder will comply with
the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use
of such prospectuses or preliminary prospectuses;
(d) Use its commercially reasonable efforts to register or qualify the
securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating
Holders and underwriters may reasonably request within ten days prior to
the original filing of such registration statement, except that the Company
will not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign corporation in
any jurisdiction where it is not so qualified;
(e) Notify the Holders participating in such registration, promptly
after it receives notice thereof, of the date and time when such
registration statement and each
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post-effective amendment thereto has become effective or a supplement to
any prospectus forming a part of such registration statement has been
filed;
(f) Notify such Holders promptly of any request by the Commission for
the amending or supplementing of such registration statement or prospectus
or for additional information;
(g) Prepare and file with the Commission, promptly upon the request of
any such Holders, any amendments or supplements to such registration
statement or prospectus which, in the written opinion of counsel for such
Holders, which opinion shall be reasonably acceptable to counsel for the
Company, is required under the Securities Act or the rules and regulations
of the Commission thereunder in connection with the distribution of the
Registrable Securities by such Holders;
(h) Prepare and file promptly with the Commission, and promptly notify
such Holders of the filing of, such amendments or supplements to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event
has occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(i) Advise such Holders, promptly after it receives notice or obtains
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly
use its commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be issued; and
(j) At the request of any Holder of Registrable Securities covered by
such registration statement, furnish to such Holder on the effective date
of the registration statement or, if such registration includes an
underwritten public offering, at the closing provided for in the
underwriting agreement, (i) an opinion dated such date of the counsel
representing the Company for the purposes of such registration, addressed
to the underwriters, if any, and to the Holder or Holders making such
request, covering such matters with respect to the registration statement,
the prospectus and each amendment or supplement thereto, proceedings under
state and federal securities laws, other matters relating to the Company,
the securities being registered and the offer and sale of such securities
as are customarily the subject of opinions of issuer's counsel provided to
underwriters in underwritten public offerings, and (ii) letters dated each
of such effective date and such closing date, from the independent
certified public accountants of the Company, addressed to the underwriters,
if any, and to the Holder or Holders making such request, stating that they
are independent certified public accountants within the meaning of the
Securities Act and dealing with such matters as are customarily provided in
"cold comfort letters" in underwritten public offerings.
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5. EXPENSES. With respect to the registration effected pursuant to
Section 2 hereof, the Company will bear all fees, costs and expenses of and
incidental to such registration and the public offering in connection therewith;
PROVIDED, HOWEVER, that the Company shall not be liable for any underwriting
discounts and commissions, which in all cases shall be borne by the Holders.
Such fees, costs and expenses of registration to be borne as provided in the
preceding sentence, include, without limitation, all registration, filing and
NASD fees, printing expenses, fees and disbursements of counsel and accountants
for the Company, all expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered or qualified and reasonable fees and disbursements (not to exceed
$15,000) of one firm of counsel for all selling security holders, selected by
the Holders of a Majority of the Registrable Securities to be included in such
registration, and reasonably acceptable to the Company.
6. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities which are included in a registration statement pursuant
to the provisions of this Agreement and each of such Holder's officers,
directors, partners, legal counsel and accountants, and each Person who controls
such Holder within the meaning of the Securities Act and any underwriter (as
defined in the Securities Act) for such Holder, and any Person who controls such
underwriter within the meaning of the Securities Act, from and against, and to
reimburse such Holder, its officers, directors, partners, legal counsel,
accountants and controlling Persons and each such underwriter and controlling
Person of such underwriter with respect to, any and all claims, actions (actual
or threatened), demands, losses, damages, liabilities, costs and expenses to
which such Holder, its officers, directors, partners, legal counsel, accountants
or controlling Persons or any such underwriter or controlling Person of such
underwriter may become subject under the Securities Act or otherwise, insofar as
such claims, actions, demands, losses, damages, liabilities, costs or expenses
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any prospectus
contained therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were made; PROVIDED,
HOWEVER, that the Company will not be liable in any such case to the extent that
any such claim, action, demand, loss, damage, liability, cost or expense is
caused by an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with written information furnished by such
Holder, such underwriter or such controlling Person specifically for use in the
preparation thereof.
(b) Each Holder of shares of Registrable Securities that are included
in a registration statement pursuant to the provisions of this Agreement agrees,
severally and not jointly, to indemnify and hold harmless the Company, its
officers, directors, legal counsel and accountants, any underwriter and each
Person who controls the Company or any underwriter within the meaning of the
Securities Act, from and against, and agrees to reimburse the Company, its
officers, directors, legal counsel, accountants and controlling Persons, any
underwriter with respect to, any and all claims, actions, demands, losses,
damages, liabilities, costs or expenses to which the Company, its officers,
directors, legal counsel, accountants, such controlling Persons, or any
underwriter may become subject under the Securities Act or
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otherwise, insofar as such claims, actions, demands, losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto, or are
caused by the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each
case, to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was so made in reliance
upon and in conformity with written information furnished by such Holder
specifically for use in the preparation thereof. Notwithstanding the foregoing,
no Holder of Registrable Securities will be obligated hereunder to pay more than
the net proceeds realized by it upon its sale of Registrable Securities included
in such registration statement.
(c) Promptly after receipt by a party indemnified pursuant to the
provisions of subsection (a) or (b) of this Section of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim therefor is to be
made against the indemnifying party pursuant to the provisions of subsection (a)
or (b), notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section and will not relieve the indemnifying party from liability under this
Section 6 unless such indemnifying party is prejudiced by such omission. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; PROVIDED, HOWEVER,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party reasonably concludes that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties will have the right to select separate counsel (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party or parties). Upon the
permitted assumption by the indemnifying party of the defense of such action,
and approval by the indemnified party of counsel, the indemnifying party will
not be liable to the indemnified party under subsection (a) or (b) for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof (other than reasonable costs of investigation) unless
(i) the indemnified party has employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence, (ii) the indemnifying party has employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time,
(iii) the indemnifying party and its counsel fail actively and vigorously to
pursue the defense of the action or (iv) the indemnifying party authorizes the
employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party will be liable to an indemnified party
for any settlement of any action or claim without the consent of the
indemnifying party, and no indemnifying party may unreasonably withhold its
consent to any such settlement. No indemnifying party will 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 the
indemnified party of a release from all liability with respect to such claim or
litigation.
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(d) If the indemnification provided for in subsection (a) or (b) of
this Section is held by a court of competent jurisdiction to be unavailable to a
party to be indemnified with respect to any claims, actions, demands, losses,
damages, liabilities, costs or expenses referred to therein, then each
indemnifying party under any such subsection, in lieu of indemnifying such
indemnified party thereunder, agrees to contribute to the amount paid or payable
by such indemnified party as a result of such claims, actions, demands, losses,
damages, liabilities, costs or expenses 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 claims, actions, demands, losses, damages, liabilities,
costs or expenses, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party will be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission 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.
Notwithstanding the foregoing, the amount any Holder of Registrable Securities
will be obligated to contribute pursuant to this subsection will be limited to
an amount equal to the per share public offering price (less any underwriting
discount and commissions) multiplied by the number of shares of Registrable
Securities sold by such Holder pursuant to the registration statement which
gives rise to such obligation to contribute (less the aggregate amount of any
damages which such Holder has otherwise been required to pay in respect of such
claim, action, demand, loss, damage, liability, cost or expense or any
substantially similar claim, action, demand, loss, damage, liability, cost or
expense arising from the sale of such Registrable Securities). No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution hereunder from any person who
was not guilty of such fraudulent misrepresentation.
7. REPORTING REQUIREMENTS UNDER EXCHANGE ACT. The Company will maintain
the effectiveness of its registration under Section 12 of the Exchange Act and
file timely (whether or not it is then required to do so) such information,
documents and reports as the Commission may require or prescribe under Section
15(d) of the Exchange Act. The Company will, forthwith upon written request,
furnish to any Holder of Registrable Securities a written statement by the
Company that it has complied with such reporting requirements. In addition, the
Company will take such other measures and file such other information, documents
and reports, as may be required of it hereafter by the Commission as a condition
to the availability of Rule 144 under the Securities Act (or any similar
exemptive provision hereafter in effect).
8. HOLDER INFORMATION. The rights of each Holder of Registrable
Securities to participate in any registration is to be effected pursuant to this
Agreement is subject to such Holder furnishing the Company with such information
with respect to such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request and as may be required
by law or by the Commission in connection therewith, and each Holder of
Registrable Securities as to which any registration is to be effected pursuant
to this Agreement shall furnish the Company with such information.
9. SUSPENSION OF SALES. Upon receipt of written notice from the Company
that a registration statement or prospectus contains an untrue statement of a
material fact or omits to
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state a material fact required to be stated therein or necessary to make the
statements therein not misleading (a "MISSTATEMENT"), each Holder of Registrable
Securities shall forthwith discontinue disposition of Registrable Securities
until such Holder has received copies of the supplemented or amended prospectus
that corrects such Misstatement, or until such Holder is advised in writing by
the Company that the use of the prospectus may be resumed, and, if so directed
by the Company, such Holder shall deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.
10. FORMS. All references in this Agreement to particular forms of
registration statements are intended to include, and will be deemed to include,
references to all successor forms which are intended to replace, or to apply to
similar transactions as, the forms herein referenced.
11. MISCELLANEOUS
11.1 WAIVERS AND AMENDMENTS. With the written consent of the Holders
of a Majority of the Registrable Securities, the obligations of the Company and
the rights of the Holders under this Agreement may be waived (either generally
or in a particular instance, either retroactively or prospectively and either
for a specified period of time or indefinitely), and with the same consent the
Company may enter into a supplementary agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of any supplemental agreement or modifying in any manner the
rights and obligations hereunder of the Holders and the Company; PROVIDED,
HOWEVER, that no such waiver or supplemental agreement may reduce the aforesaid
proportion of Registrable Securities, the Holders of which are required to
consent to any waiver or supplemental agreement, without the consent of the
Holders of all the Registrable Securities; and PROVIDED FURTHER that any such
waiver amendment or supplement that applies only to a particular registration
shall require only the written consent of the Holders of a Majority of the
Registrable Securities included in such registration. Upon the effectuation of
each such waiver, consent or agreement of amendment or modification, the Company
will give prompt written notice thereof to the Holders of the Registrable
Securities who have not previously consented thereto in writing. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally or by course of dealing, but only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, except to the extent provided in this Section 11.1.
Specifically, but without limiting the generality of the foregoing, the failure
of any Investor at any time or times to require performance of any provision
hereof by the Company will not affect the right of any Investor at a later time
to enforce the same. No waiver by any party of the breach of any term or
provision contained in this Agreement, in any one or more instances, will be
deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
11.2 EFFECT OF WAIVER OR AMENDMENT. Each Investor acknowledges that by
operation of Section 11.1 the Holders of a Majority of the Registrable
Securities will, subject to the limitations contained in Section 11.1, have the
right and power to diminish or eliminate certain rights of such Investor under
this Agreement.
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11.3 RIGHTS OF INVESTORS INTER SE. Each Investor has the absolute
right to exercise or refrain from exercising any right or rights which such
Investor may have by reason of this Agreement or any Registrable Security,
including, without limitation, the right to consent to the waiver of any
obligation of the Company under this Agreement and to enter into an agreement
with the Company for the purpose of modifying this Agreement or any agreement
effecting any such modification, and such Investor will not incur any liability
to any other Investor or Investors with respect to exercising or refraining from
exercising any such right or rights.
11.4 NOTICES. All notices, requests, consents and other communications
required or permitted hereunder will be in writing and will be delivered, or
mailed first class postage prepaid, registered or certified mail,
(a) If to any Investor, addressed to such Investor at its address
shown on Annex A hereto, or at such other address as such Investor may
specify by written notice to the Company; or
(b) If to the Company, at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as the Company may specify
by written notice to the Investors;
and each such notice, request, consent and other communication will for all
purposes of this Agreement be treated as being effective or having been given
when delivered, if delivered personally, or, if sent by mail, at the earlier of
its actual receipt or three days after the same has been deposited in a
regularly maintained receptacle for the deposit of United States mail, addressed
and postage prepaid as aforesaid.
11.5 SEVERABILITY. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, it is the intention of the parties
hereto that all other provisions of this Agreement and of each other agreement
entered into pursuant to this Agreement should be given effect separately from
the provision or provisions determined to be illegal or unenforceable and not be
affected thereby.
11.6 PARTIES IN INTEREST. All the terms and provisions of this
Agreement will be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto, whether so
expressed or not and, in particular, will inure to the benefit of and be
enforceable by the Holder or Holders at the time of any registration of
Registrable Securities. Subject to the immediately preceding sentence, this
Agreement will not run to the benefit of or be enforceable by any Person other
than a party to this Agreement and its successors and assigns.
11.7 HEADINGS. The headings of the sections, subsections and
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement.
11.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior understanding among
such parties.
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11.9 CHOICE OF LAW. This Agreement and any and all matters related to
or arising under this Agreement shall be governed by the internal laws of the
State of California, regardless of any provisions on choice of or conflicts of
law.
11.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts will be deemed an original, will be construed together and will
constitute one and the same instrument.
(SIGNATURE PAGE FOLLOWS)
11
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed personally or by a duly authorized representative
thereof as of the day and year first above written.
DIGITAL LAVA INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Chief Executive Officer
SPECIAL SITUATIONS TECHNOLOGY FUND L.P.
By: /s/ ▇▇▇▇▇ GREENHOUSE
------------------------
Name: ▇▇▇▇▇ Greenhouse
Title: Managing Director
SPECIAL SITUATIONS PRIVATE EQUITY L.P.
By: /s/ ▇▇▇▇▇ GREENHOUSE
------------------------
Name: ▇▇▇▇▇ Greenhouse
Title: Managing Director
NEW FRONTIER CAPITAL L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: General Partner
WESTWARD INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: President
JMG CAPITAL PARTNERS L.P.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Member Manager
S-1
JMG TRITON OFFSHORE FUND LIMITED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Member Manager
▇▇▇▇▇▇ INVESTMENT PARTNERS I
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
▇▇▇▇▇▇ INVESTMENT PARTNERS II
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
UPLAND ASSOCIATES L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Managing Partner
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
VALOR CAPITAL MANAGEMENT L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ III
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: General Partner
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇, ▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: General Partner
S-2
VERTICAL PARTNERS L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Partner
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ #2
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Insurance Trust
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
Title: Trustee
▇▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇ #1
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
------------------------
▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
S-3
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ INSURANCE TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Trustee
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇ ROLLOVER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Director-Investments
▇▇▇▇▇▇ ▇. ▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
S-4
ANNEX A
INVESTORS
Number of
Name and Address Shares
--------------------------------------------------------------------------------
Special Situations Technology Fund L.P. 250,000
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Special Situations Private Equity Fund L.P. 400,000
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
New Frontier Capital L.P. 306,250
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Westward Inc. 43,750
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
JMG Capital Partners L.P. 125,000
1999 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
JMG Triton Offshore Fund Limited 125,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Investment Partners I 169,500
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Investment Partners II 38,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Upland Associates L.P. 250,000
Attn: ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇. 10036
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 160,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Valor Capital Management L.P. 100,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 100,000
c/o Twin Oaks Partners
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 100,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, Grey & Co. 60,000
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Vertical Partners L.P. 40,000
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ #2 65,000
c/o Fiduciary Trust International
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Insurance Trust 25,000
c/o Fiduciary Trust International
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 25,000
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ #1 10,000
c/o Fiduciary Trust International
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 25,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ 10,000
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Insurance Trust 10,000
The Courtyard, #12
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,000
CIBC ▇▇▇▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 10,000
▇/▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ 10,000
HBSC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 12,500
First Security ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------------------------
Total: 2,500,000