EXHIBIT 10.12
SERIES D REGISTRATION RIGHTS AGREEMENT
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THIS SERIES D REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as
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of December 7, 1999, by and among divine interVentures, inc., a Delaware
corporation (the "Corporation") and those persons set forth on the Schedule of
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Purchasers hereto (collectively, the "Purchasers" and individually, a
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"Purchaser").
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Pursuant to that Purchase Agreement, dated as of the date hereof, by and
between the Purchasers and the Corporation (as amended and modified from time to
time, the "Purchase Agreement"), the other documents and instruments referred to
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therein and consummation of the transactions contemplated thereby, each of the
Purchasers is acquiring shares of the Corporation's Series D Senior
Participating Convertible Redeemable Preferred Stock, $0.001 par value per share
or Series D-1 Senior Participating Convertible Redeemable Preferred Stock,
$0.001 par value per share (collectively, the "Series D Preferred Shares"). In
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order to induce the Purchasers to enter into the Purchase Agreement and the
other agreements contemplated thereby and to purchase the Series D Preferred
Shares in the manner contemplated thereby, the Corporation has agreed to provide
the registration rights set forth in this Agreement. Except as otherwise
indicated herein, capitalized terms used herein shall have the meanings set
forth in Section 1 hereof.
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Notwithstanding anything to the contrary herein, this Agreement shall apply
to a party hereto only with respect to periods beginning (i) in the case of the
Company, the date any Purchaser first acquires Purchaser Shares under the
Purchase Agreement, and (ii) in the case of a Purchaser, the Closing Date for
such Purchaser. To the extent the Purchase Agreement is terminated in accordance
with its terms with respect to any party hereto, this Agreement shall have no
further force and effect with respect to such party.
AGREEMENTS
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In consideration of the premises and the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement.
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"Class A Common Stock" means the Class A Common Stock, $0.001 par value per
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share of the Corporation.
"Class B Common Stock" means the Class B Common Stock, $0.001 par value per
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share, of the Corporation.
"Commission" means the United States Securities and Exchange Commission or
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any successor thereto.
"Common Stock" means, collectively, the Class A Common Stock and the Class
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B Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
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any similar federal statute, as the same shall be in effect from time to time.
"Founders Shares" means at any time (i) any shares of Class A Common Stock
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then outstanding which were sold by the Corporation prior to the date hereof at
a purchase price of $0.001 per share, (ii) any shares of Class A Common Stock
then outstanding which were issued upon conversion of shares of Class B Common
Stock which were sold prior to the date hereof at a purchase price of $0.001 per
share, (iii) any shares of Class A Common Stock then issuable upon conversion of
outstanding shares of Class B Common Stock which were sold prior to the date
hereof at a purchase price of $0.001 per share, (iv) any shares of Class A
Common Stock then outstanding which were issued as, or were issued directly or
indirectly upon the conversion or exercise of other securities issued as, a
dividend or other distribution with respect to or in replacement of any shares
referred to in (i), (ii) or (iii); and (v) any shares of Class A Common Stock
then issuable directly or indirectly upon the conversion or exercise of other
securities which were issued as a dividend or other distribution with respect to
or in replacement of any shares referred to in (i), (ii) or (iii); provided that
Founders Shares shall not include any shares which have been disposed of
pursuant to an effective registration statement under the Securities Act or sold
pursuant to Rule 144.
"IPO" means the Corporation's first underwritten public offering of shares
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of Common Stock pursuant to an effective registration statement under the
Securities Act.
"Junior Preferred Stock" means, collectively, the Series A Junior
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Convertible Preferred Stock, $0.001 par value per share, the Series B
Convertible Preferred Stock, $0.001 par value per share, and the Series C
Convertible Preferred Stock, $0.001 par value per share, of the Corporation.
"Junior Preferred Shares" means at any time (i) any shares of Class A
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Common Stock then outstanding which were issued upon conversion of shares of
Junior Preferred Stock or upon conversion of shares of Class B Common Stock
issued upon conversion of Junior Preferred Stock; (ii) any shares of Class A
Common Stock then issuable upon conversion of shares of then outstanding Junior
Preferred Stock or upon conversion of shares of Class B Common Stock issued or
issuable upon conversion of Junior Preferred Stock; (iii) any shares of Class A
Common Stock then outstanding which were issued as, or were issued directly or
indirectly upon the conversion or exercise of other securities issued as, a
dividend or other distribution with respect to or in replacement of any shares
referred to in (i) or (ii); and (iv) any shares of Class A Common Stock then
issuable directly or indirectly upon the conversion or exercise of other
securities which were issued as a dividend or other distribution with respect to
or in replacement of any shares referred to in (i) or (ii); provided, however,
that Junior Preferred Shares shall not include any shares which have been (a)
disposed of pursuant to an effective registration statement under the Securities
Act, (b) sold or otherwise transferred in a transaction in which the
registration rights applicable to such shares have not been assigned, or (c)
sold pursuant to Rule 144.
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"Other Registrable Shares" means shares of the Company's outstanding or
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issuable Class A Common Stock with respect to which the holder thereof has a
contractual registration right that is pari passu in order of priority to the
Purchaser Registrable Shares, whether such agreement is entered into as of or
after the date of this Agreement, but excluding Founders Shares.
"Person" means an individual, corporation, partnership, limited liability
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company, limited partnership, syndicate, person (including, without limitation,
a "Person" as defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government.
"Public Offering" means any offering by the Corporation of its equity
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securities to the public pursuant to an effective registration statement under
the Securities Act.
"Purchaser Registrable Shares" means at any time (i) any shares of Common
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Stock then outstanding which were issued upon conversion of Series D Preferred
Shares originally issued to the Purchasers; (ii) any shares of Common Stock then
issuable upon conversion of then outstanding Series D Preferred Shares
originally issued to the Purchasers; (iii) any shares of Common Stock then
outstanding which were issued as, or were issued directly or indirectly upon the
conversion or exercise of other securities issued as, a dividend or other
distribution with respect or in replacement of any shares referred to in (i) or
(ii); and (iv) any shares of Common Stock then issuable directly or indirectly
upon the conversion or exercise of other securities which were issued as a
dividend or other distribution with respect to or in replacement of any shares
referred to in (i), (ii) or (iii); provided, however, that Purchaser Registrable
Shares shall cease to be Purchaser Registrable Shares when such Purchaser
Registrable Shares have been (a) disposed of pursuant to an effective
registration statement under the Securities Act, (b) sold or otherwise
transferred in a transaction in which the rights under the provisions of this
Agreement have not been properly assigned, or (c) sold pursuant to Rule 144. For
purposes of this Agreement, a Person will be deemed to be a holder of Purchaser
Registrable Shares whenever such Person has the then-existing right to acquire
such Purchaser Registrable Shares (by conversion or otherwise), whether or not
such acquisition actually has been effected. Subject to the foregoing, Purchaser
Registrable Shares shall continue to constitute Purchaser Registrable Shares in
the hands of any permitted transferee of a Purchaser.
"Rule 144" means Rule 144 (including Rule 144(k)) of the Commission under
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the Securities Act or any similar provision then in force under the Securities
Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar federal statute, as the same shall be in effect from time to time.
2. Piggyback Registration.
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2.1 Right to Piggyback. After the consummation of an IPO, whenever
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the Corporation proposes to register Common Stock under the Securities Act
(other than pursuant to a registration statement filed on Form S-8 or Form S-4,
or any successor forms, or otherwise filed in connection with a merger,
acquisition, exchange offer or other business combination transaction or an
offering of securities solely to the Corporation's existing security holders or
employees)
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whether for sale on its own account or pursuant to a demand for registration by
other holders of shares of Common Stock, and the registration form to be used
may be used for the registration of any Purchaser Registrable Shares (a
"Piggyback Registration"), the Corporation will give prompt written notice to
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all holders of the Purchaser Registrable Shares of its intention to effect such
a registration and will include in such registration all Purchaser Registrable
Shares (subject to, and in accordance with, the priorities set forth in Sections
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2.2 and Section 2.3 below) with respect to which the Corporation has received
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written requests for inclusion within twenty (20) days after the Corporation's
notice. Notwithstanding the foregoing, if a Piggyback Registration is not an
underwritten registration, the Corporation shall not be required to include any
Purchaser Registrable Shares held by any Person in such Piggyback Registration
if such Person at the time of the filing of the registration statement for such
Piggyback Registration would be permitted to sell all of the Purchaser
Registrable Shares held by such Person, without registration, pursuant to Rule
144.
2.2 Priority on Non-Demand Registrations. If a Piggyback
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Registration is an underwritten registration on behalf of the Corporation that
does not constitute a "demand" registration required pursuant to an agreement
with the Corporation, and the managing underwriters advise the Corporation in
writing that in their opinion the number of shares of Common Stock requested to
be included in such registration exceeds the number which can be marketed (a) at
a price per share reasonably related to the then-current market value per share
of the Common Stock, and (b) without materially and adversely affecting the
entire offering, the Corporation will include in such registration up to the
amount determined advisable by the underwriters:
(i) first, the shares of Common Stock that the Corporation proposes to
sell;
(ii) second, the Purchaser Registrable Shares and the Other Registrable
Shares requested to be included in such registration, pro rata among the holders
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of such Purchaser Registrable Shares and Other Registrable Shares based on the
number of shares of Common Stock requested to be included in such registration
by the holders thereof; and
(iii) third, the Junior Preferred Shares and any other shares of Common
Stock held by stockholders of the Corporation which are not Other Registrable
Shares (including the Founders Shares), requested to be included in such
registration, pro rata among the holders of such Junior Preferred Shares and
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other shares on the basis of the number of shares which are owned by such
holders and requested to be included in such registration, or otherwise pursuant
to any contractual registration rights applicable to such shares.
2.3 Priority on Demand Registrations. If a Piggyback Registration is
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an underwritten registration pursuant to a demand for registration (other than a
Demand Registration under Section 3 hereof, the priority of which will be
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governed by Section 3.4 below) by holders of Other Registrable Shares and the
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managing underwriters advise the Corporation in writing that in their opinion
the number of shares of Common Stock requested to be included in such
registration exceeds the number which can be marketed (a) at a price per share
reasonably related to the then-current market value per share of the Common
Stock, and (b) without materially and adversely affecting the entire offering,
the Corporation will include in such registration up to the amount determined
advisable by the underwriters:
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(i) first, (A) the shares of Common Stock requested to be included therein
by the holders of Other Registrable Shares on behalf of whom such registration
has been initially requested; (B) the Purchaser Registrable Shares requested to
be included in such registration by the holders of Purchaser Registrable Shares
hereunder; and (C) any securities that the Corporation proposes to sell, pro
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rata, among the parties in clauses (A), (B) and (C)based on the number of shares
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of Common Stock requested to be included in such registration by the holders
thereof; and
(ii) second, the Junior Preferred Shares and any other shares of Common
Stock held by stockholders of the Corporation which are not entitled to be pari
passu with the Purchaser Registrable Shares with respect to such registration
(including the Founders Shares), requested to be included in such registration,
pro rata among the holders of such Junior Preferred Shares and other shares on
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the basis of the number of shares which are owned by such holders and requested
to be included in such registration, or otherwise pursuant to any contractual
registration rights applicable to such shares.
Without limiting this Section 2.3 or Section 2.2, (i) no Founders Shares
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shall be included in an underwritten registration by the Corporation unless all
of the Purchaser Registrable Shares requested to be included in such
registration pursuant to this Agreement are permitted to be included in such
registration, and (ii) no shares of Common Stock (including Founders Shares)
held by executive officers of the Corporation shall be included in an
underwritten registration if the managing underwriters advise the Corporation
that the inclusion of shares of Common Stock held by executive officers of the
Corporation will adversely affect the offering.
2.4 Right to Terminate Registration. The Corporation shall have the
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right to withdraw any registration initiated by it under this Section 2 prior to
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the effectiveness of such registration whether or not any holder of its
securities has elected to include securities in such registration.
3. Demand Registrations.
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3.1 Requests for Registration. The holders of the outstanding
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Purchaser Registrable Shares may request registration under the Securities Act
(a "Demand Registration) of all or any portion of its Purchaser Registrable
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Shares on Form S-1 or any similar long-form registration ("Long-Form
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Registrations") or, if available, on Form S-2 or S-3 or any similar short-form
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registration ("Short-Form Registrations") at any time following the earlier of
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(a) six (6) months following the consummation by the Corporation of an IPO, and
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(b) the third anniversary of the date hereof. Each request for a Demand
Registration shall specify the approximate number of Purchaser Registrable
Shares requested to be registered and the anticipated per share price range for
such offering. Within ten (10) days after receipt of any such request, the
Corporation will give written notice of such requested registration to all other
holders of Purchaser Registrable Shares and, subject to Section 3.4 below, will
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include in such registration all Purchaser Registrable Shares with respect to
which the Corporation has received written requests for inclusion therein within
fifteen (15) days after the receipt of the Corporation's notice. Notwithstanding
anything to the contrary herein, if a Demand Registration would constitute an
IPO, the Corporation may elect to pre-empt such Demand Registration with a
primary registration by giving written notice to that effect within five (5)
days
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of determining the Purchaser Registrable Shares requested to be included in the
Demand Registration, in which case such registration would constitute a
Piggyback Registration to which the priorities in Section 2.2 would apply.
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3.2 Long-Form Registrations. The holders of at least a majority of
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the Purchaser Registrable Shares held by the Corporate Investors (as defined in
the Series D Stockholders Agreement dated as of the date hereof) will be
entitled to request one (1) Long-Form Registration and the holders of at least a
majority of the Purchaser Registrable Shares held by Financial Investors (as
defined in the Series D Stockholders Agreement dated as of the date hereof) will
be entitled to request one (1) Long-Form Registrations, in each case in which
the Corporation will pay all Registration Expenses. The holders of at least a
majority of the Purchaser Registrable Shares will be entitled to request
unlimited Long-Form Registrations in which the holders of Purchaser Registrable
Shares pay their share of Registration Expenses, as provided in Section 5. A
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registration will not count as one of the Corporation paid Long-Form
Registrations until it has become effective and unless the holders of Purchaser
Registrable Shares are able to register and sell at least eighty percent (80%)
of the Purchaser Registrable Shares initially requested to be registered;
provided that, in any event, the Corporation will pay all Registration Expenses
in connection with any registration initiated as a Corporation paid Long-Form
Registration whether or not it has become effective .
3.3 Short-Form Registrations. In addition to the Long-Form
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Registrations provided pursuant to Section 3.2, the holders of at least fifteen
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percent (15%) of the Purchaser Registrable Shares will be entitled to request
unlimited Short-Form Registrations in which the Corporation will pay all
Registration Expenses. Demand Registrations will be Short-Form Registrations
whenever the Corporation is permitted to use any applicable short form. After
the Corporation has become subject to the reporting requirements of the Exchange
Act, the Corporation will use its best efforts to make Short-Form Registrations
available for the sale of Purchaser Registrable Shares.
3.4 Priority on Demand Registrations. The Corporation will not
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include in any Demand Registration any securities which are not Purchaser
Registrable Shares (except for Other Registrable Shares) without the prior
written consent of the holders of a majority of the Purchaser Registrable
Shares. If a Demand Registration is an underwritten offering and the managing
underwriters advise the Corporation in writing that in their opinion the number
of Purchaser Registrable Shares and, if permitted hereunder, other securities
requested to be included in such offering exceeds the number of Purchaser
Registrable Shares and other securities, if any, which can be sold in an orderly
manner in such offering within a price range acceptable to the holders of a
majority of the Purchaser Registrable Shares initially requesting registration,
the Corporation will include in such registration (i) first, the Purchaser
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Registrable Shares and Other Registrable Shares requested to be included in such
registration by the holders thereof, pro rata among such holders on the basis of
the number of shares of Purchaser Registrable Shares and Other Registrable
Shares requested to be included in such registration by the holders thereof, and
(ii) second, the other securities requested to be included in such registration
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which in the opinion of such underwriters can be sold in an orderly manner
within the price range of such offering.
3.5 Restrictions on Demand Registrations. The Corporation will not
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be obligated to effect any Demand Registration within six months after the
effective date of a previous Demand
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Registration. The Corporation may postpone for up to ninety (90) days (but not
more than once in a six (6) month period) the filing or the effectiveness of a
registration statement for a Demand Registration if the Corporation's board of
directors determines that such Demand Registration is reasonably likely to have
an adverse effect on any proposal or plan by the Corporation or any of its
subsidiaries to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or any other
material financing or transaction; provided that, in such event, the holders of
Purchaser Registrable Shares initially requesting such Demand Registration will
be entitled to withdraw such request and, if such request is withdrawn, such
Demand Registration will not count as one of the Corporation paid Demand
Registrations hereunder and the Corporation will pay all Registration Expenses
in connection with such withdrawn registration.
3.6 Selection of Underwriters. The holders of a majority of the
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Purchaser Registrable Shares initially requesting registration will have the
right to approve (which approval will not be unreasonably withheld) the
investment banker(s) and manager(s) selected by the Corporation's board of
directors to administer the offering.
3.7 Other Registration Rights. The Corporation will not grant to any
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Persons the right to request the Corporation to register any equity securities
of the Corporation, or any securities convertible or exchangeable into or
exercisable for such securities, other than rights which are pari passu or
junior in all respects to the rights granted to the holders of Purchaser
Registrable Shares hereunder (including, without limitation, priority in any
registration by the Corporation), without the prior written consent of the
holders of (a) at least a majority of the outstanding Purchaser Shares held by
the Corporate Investors, and (b) a majority of the outstanding Purchaser Shares
held by the Financial Investors (as each such term is defined in the Series D
Stockholders Agreement dated as of the date hereof).
4. Registration Procedures. Whenever the holders of Purchaser Registrable
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Shares have requested that any Purchaser Registrable Shares be registered
pursuant to this Agreement, the Corporation will use its reasonable best efforts
to effect the registration and sale of such Purchaser Registrable Shares in
accordance with the intended method of disposition thereof, and, pursuant
thereto, the Corporation will as expeditiously as reasonably possible:
(a) prepare and file with the Commission a registration
statement with respect to such Purchaser Registrable Shares and thereafter use
its reasonable best efforts to cause such registration statement to become and
remain effective for the period of the distribution contemplated thereby,
determined as hereinafter provided (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto with respect to
a Demand Registration, the Corporation will furnish to the counsel selected by
the holders of a majority of the Purchaser Registrable Shares initiating such
registration statement copies of all such documents proposed to be filed, which
documents will be subject to review of such counsel);
(b) notify each holder of Purchaser Registrable Shares of the
effectiveness of each Registration Statement filed hereunder and prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
comply with the Securities Act; and, with respect to Demand
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Registrations, as may be necessary to keep such registration statement effective
for a period of either (i) not less than six months (subject to extension
pursuant to Section 8) or, if such registration statement relates to an
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underwritten offering, such period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in connection with
sales of Purchaser Registrable Shares by an underwriter or dealer or (ii) such
shorter period as will terminate when all of the securities covered by such
registration statement have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement (but in any event not before the expiration of any longer
period required under the Securities Act), and to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement;
(c) furnish to each seller of Purchaser Registrable Shares such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus(es) included in such registration statement (including
each preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Purchaser
Registrable Shares owned by such seller;
(d) notify each seller of such Purchaser Registrable Shares, 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, contains
an untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, and, at the request of any such seller, the Corporation will prepare
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Purchaser Registrable Shares, such prospectus will not
contain any untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made (and such sellers shall suspend the use
of the prospectus until the requisite changes thereto have been made);
(e) use its reasonable best efforts to cause all such Purchaser
Registrable Shares to be listed on each securities exchange or market on which
the Common Stock is then listed;
(f) use its reasonable best efforts to cause such Purchaser
Registrable Shares to be registered or qualified with or approved by such other
governmental agencies or authorities in such jurisdictions as may be necessary
to consummate the disposition of such Purchaser Registrable Shares;
(g) provide a transfer agent and registrar for all such
Purchaser Registrable Shares not later than the effective date of such
registration statement;
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(h) enter into such customary agreements (including underwriting
agreements in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Purchaser
Registrable Shares;
(i) make available for inspection by any seller of Purchaser
Registrable Shares, any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Corporation, and cause the
Corporation's officers, directors, employees and independent accountants to
supply all information reasonably requested by any such seller or underwriter,
attorney, accountant or agent in connection with such registration statement;
(j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Corporation's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) advise each seller of such Purchaser Registrable Shares,
promptly after it shall receive notice or obtain 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 such purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if any such stop order
shall be issued (and, if such stop order shall be issued, such sellers shall
suspend the use of the prospectus until it shall be withdrawn);
(l) at the request of the managing underwriters in connection
with an underwritten offering, furnish on the date or dates provided for in the
underwriting agreement (i) an opinion of counsel, addressed to the underwriters
and, if permitted by applicable professional standards, to the sellers of
Purchaser Registrable Shares, covering such matters as such underwriters and
sellers may reasonably request, including such matters as are customarily
furnished in connection with an underwritten offering; and (ii) a letter or
letters from the independent certified public accountants of the Corporation
addressed to the underwriters and, if permitted by applicable professional
standards, to the sellers of Purchaser Registrable Shares, covering such matters
as such underwriters or sellers may reasonably request, in which letter(s) such
accountants shall state, without limiting the generality of the foregoing, that
they are independent certified public accountants within the meaning of the
Securities Act and that in their opinion the financial statements and other
financial data of the Corporation included in the registration statement, the
prospectus(es), or any amendment or supplement thereto, comply in all material
respects with the applicable accounting requirements of the Securities Act; and
Notwithstanding any provision of this Section 4 to the contrary, the
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Corporation shall not be required to amend or supplement a prospectus if such
amendment of supplement would require the Corporation to disclose a material
financing, acquisition or other transaction then being pursued
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by the Corporation and the Executive Committee of the Board of Directors of the
Corporation shall determine in good faith that such disclosure is not in the
best interests of the Corporation or would interfere with such transaction;
provided that the Corporation shall give immediate notice thereof to holders of
Purchaser Registrable Shares.
For purposes of Section 4(a) and Section 4(b), the period of distribution
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of Purchaser Registrable Shares in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Purchaser Registrable Shares in any other registration shall be deemed to
extend until the earlier of (i) the sale of all Purchaser Registrable Shares
covered thereby and (ii) the end of the period of distribution for the holders
of its shares of Common Stock on whose behalf the registration has been made.
5. Registration Expenses.
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5.1 Corporation's Expenses. All expenses incident to the
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Corporation's performance of or compliance with this Agreement, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, listing fees, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel for the
Corporation and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons retained by the
Corporation (all such expenses being herein called "Registration Expenses")
shall be borne by the Corporation.
5.2 Reimbursement. In connection with each Demand Registration, the
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Corporation will reimburse the holders of Purchaser Registrable Shares covered
by such registration for the reasonable fees and disbursements of one counsel
chosen by the holders of a majority of the Purchaser Registrable Shares
initially requesting such registration. In connection with each Demand
Registration and each Piggyback Registration, the Corporation shall reimburse
the holders of Purchaser Registrable Shares included in such registration for
the reasonable fees and disbursements of each additional counsel retained by any
holder of Purchaser Registrable Shares for the purpose of rendering any legal
opinion required by the Corporation or the managing underwriter(s) to be
rendered on behalf of such holder in connection with any underwritten Demand
Registration or Piggyback Registration.
5.3 Holder's Expenses. Notwithstanding anything to the contrary
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contained herein, each holder of Purchaser Registrable Shares shall bear and pay
all underwriting discounts and commissions and transfer taxes applicable to the
Purchaser Registrable Shares sold for such holder's account.
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6. Indemnification.
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6.1 By the Corporation. The Corporation agrees to indemnify, to the
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extent permitted by law, each holder of Purchaser Registrable Shares, its
managers, officers and directors and each Person who controls such holder
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses (including without limitation, attorneys' fees)
("Liabilities") caused by any untrue or alleged untrue statement of material
------------
fact contained in any registration statement, prospectus or preliminary
prospectus, or any amendment thereof or supplement thereto, or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the
Corporation by such holder expressly for use therein or by such holder's failure
to deliver a copy of the registration statement or prospectus or any amendments
or supplements thereto after the Corporation has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Corporation shall indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Purchaser Registrable Shares. The payments
required by this Section 6.1 will be made periodically during the course of the
-----------
investigation or defense, as and when bills are received or expenses incurred.
6.2 By Each Holder. In connection with any registration statement in
--------------
which a holder of Purchaser Registrable Shares is participating, each such
holder shall furnish to the Corporation in writing such information and
affidavits as the Corporation reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law,
shall indemnify the Corporation, its directors and officers and each Person who
controls the Corporation (within the meaning of the Securities Act) against any
Liabilities resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus, or any amendment thereof or supplement thereto, or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by such holder expressly for use in such registration
statement or prospectus; provided that the obligation to indemnify under this
Section 6.2 or to contribute under Section 6.4 below will be several, not joint
----------- -----------
and several, among such holders of Purchaser Registrable Shares, and the
liability of each such holder of Purchaser Registrable Shares under this Section
-------
6.2 and under Section 6.4 shall be limited to the net amount received by such
--- -----------
holder from the sale of Purchaser Registrable Shares pursuant to such
registration statement.
6.3 Procedure. Any Person entitled to indemnification hereunder shall
---------
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the
-11-
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
6.4 Contribution. To the extent any indemnification by an
------------
indemnifying party provided for in this Section 6 is prohibited or limited by
---------
law, the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such Liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such Liabilities, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of material
fact or omission or alleged omission to state a material fact, has been made by,
or relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4 were determined by pro rata allocation
-----------
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph;
provided that the limits in the final proviso of Section 6.2 shall apply to this
-----------
Section 6.4. No Person guilty of fraudulent misrepresentation (within the
-----------
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
6.5 Other Indemnification Provisions. The indemnification and
--------------------------------
contribution provided for under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified party
and will survive the transfer of securities.
7. Compliance with Rule 144. In the event that the Corporation (a)
------------------------
registers a class of securities under Section 12 of the Exchange Act, (b) issues
an offering circular meeting the requirements of Regulation A under the
Securities Act, or (c) commences to file reports under Section 13 or 15(d) of
the Exchange Act, then at the request of any holder who proposes to sell
securities in compliance with Rule 144 of the Commission, the Corporation will
(i) forthwith furnish to such holder, upon request, a written statement of
compliance with the filing requirements of the Commission as set forth in Rule
144, as such rule may be amended from time to time, and (ii) use its reasonable
best efforts to make available to the public and such holders such information
as will enable the holders to make sales pursuant to Rule 144.
-12-
8. Participation in Underwritten Registrations. No Person may
-------------------------------------------
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell its shares of Common Stock on the basis provided in
any underwriting arrangements approved by the Corporation or any other Person or
Persons entitled to approve such arrangements, and (b) completes and executes
all questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrange ments. Each Person that is participating in any
registration hereunder agrees that, upon receipt of any notice from the
Corporation of the happening of any event of the kind described in Section 4(d)
------------
above, such Person will forthwith discontinue the disposition of its Purchaser
Registrable Shares pursuant to the registration statement until such Person's
receipt of the copies of a supplemented or amended prospectus as contemplated by
such Section 4(d). In the event the Corporation shall give any such notice, the
------------
applicable time period mentioned in Section 4(b) during which a registration
------------
statement is to remain effective shall be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
this Section 8 to and including the date when each seller of Purchaser
---------
Registrable Shares covered by such registration statement shall have received
the copies of the supplemented or amended prospectus contemplated by Section
-------
4(d).
----
9. Holdback Agreements. Each holder of Purchaser Registrable Shares
-------------------
agrees not to effect any public sale or distribution of equity securities of the
Corporation, or any securities convertible into or exchangeable or exercisable
for such securities, (i) during the seven (7) days prior to, and during the one
hundred and eighty (180) days following, the effective date of an IPO (except as
part of such underwritten registration), or (ii) during the seven (7) days prior
to and during the ninety (90) days following the effective date of any
underwritten Public Offering, other than an IPO, (except as part of such
underwritten registration), in the case of each of Section 9(i) and Section
------------ -------
9(ii) unless the underwriters managing the Public Offering otherwise agree to a
-----
shorter period and unless any of the holders of Founders Shares, directors,
officers and/or 5% shareholders of the Corporation are subject to a shorter
period. Each holder of Purchaser Registrable Shares agrees to enter into
customary lock-up agreements consistent with the foregoing if requested by any
underwriter of any such Public Offering.
10. Miscellaneous.
-------------
10.1 Assignment of Registration Rights. The registration rights of any
---------------------------------
Purchaser under this Agreement with respect to any Purchaser Registrable Shares
may be assigned to any Person who acquires such Purchaser Registrable Shares;
provided that (a) the assigning Purchaser shall give the Corporation written
--------
notice at or prior to the time of such assignment stating the name and address
of the assignee and identifying the shares with respect to which the rights
under this Agreement are being assigned; (b) such assignee shall agree in
writing, in form and substance reasonably satisfactory to the Corporation, to be
bound as a Purchaser by the provisions of this Agreement; and (c) immediately
following such assignment the further disposition of such securities by such
assignee is restricted under the Securities Act.
-13-
10.2 No Inconsistent Agreements. The Corporation is not a party to
--------------------------
and will not hereafter enter into any agreement with respect to its securities
which is inconsistent with or violates the rights granted to the holders of
Purchaser Registrable Shares in this Agreement.
10.3 Adjustments Affecting Purchaser Registrable Shares. The
--------------------------------------------------
Corporation will not take any action, or permit any change to occur, with
respect to its securities which would materially and adversely affect the
ability of the holders of Purchaser Registrable Shares to include such Purchaser
Registrable Shares in a registration undertaken pursuant to this Agreement or
which would adversely affect the marketability of such Purchaser Registrable
Shares in any such registration (including, without limitation, effecting a
stock split or a combination of shares).
10.4 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective permitted successors and assigns of the parties hereto, whether so
expressed or not.
10.5 Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
10.6 Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience of reference only and do not constitute a part of,
and shall not be utilized in interpreting, this Agreement.
10.7 Notices. Any notices required or permitted to be sent hereunder
-------
shall be delivered personally or mailed, certified mail, return receipt
requested, or delivered by overnight courier service to the following addresses,
or such other address as any party hereto designates by written notice to the
Corporation, and shall be deemed to have been given upon delivery, if delivered
personally, three days after mailing, if mailed, or one business day after
delivery to the courier, if delivered by overnight courier service:
If to the Corporation, to:
divine interVentures, inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
-14-
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Purchasers or other holders of Purchaser Registrable Shares, to
the addresses set forth in the stock records of the Corporation.
10.8 Governing Law. All questions concerning the construction,
-------------
validity and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement, shall be governed by the laws of the
State of Delaware applicable to contracts made and wholly to be performed in
that state.
10.9 Amendments and Waivers. The provisions of this Agreement may be
----------------------
amended upon the written agreement of the Corporation and the holder or holders
of (a) at least a majority of the outstanding Purchaser Shares held by the
Corporate Investors, and (b) a majority of the outstanding Purchaser Shares held
by the Financial Investors (as each such term is defined in the Purchase
Agreement). Any waiver, permit, consent or approval of any kind or character on
the part of any holders of any provision or condition of this Agreement must be
made in writing and shall be effective only to the extent specifically set forth
in writing.
10.10 Final Agreement. This Agreement, constitutes the complete and
---------------
final agreement of the parties concerning the matters referred to herein and
supersedes all prior agreements and understandings.
10.11 Execution. This Agreement may be executed in any number of
---------
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument.
10.12 No Strict Construction. The language used in this Agreement will
----------------------
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be used against any
party.
SCHEDULE OF PURCHASERS
----------------------
Frontenac VII Limited Partnership
Frontenac Masters VII Limited Partnership
First Chicago Investment Corporation
Cross Creek Partners X, LLC
Mesirow Capital Partners VII
Sumitomo Corporation of America
Sumitomo Corporation
Microsoft Corporation
Dell USA L.P.
CBW/SK divine Investments
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
DIVINE INTERVENTURES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Executive Vice President
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
FRONTENAC VII LIMITED PARTNERSHIP
By: Frontenac Company VII, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Its: Member
---------------------
FRONTENAC MASTERS VII LIMITED PARTNERSHIP
By: Frontenac Company VII, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Its: Member
---------------------
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
FIRST CHICAGO INVESTMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Its: Attorney In Fact
---------------------------
CROSS CREEK PARTNERS X, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Its: General Partner
---------------------------
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
MICROSOFT CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Its: Chief Financial Officer
---------------------------
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
MESIROW CAPITAL PARTNERS VII,
an Illinois Limited Partnership
By: Mesirow Financial Services, Inc.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
SUMITOMO CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------
Its: Financial Investor
----------------------
▇▇▇▇ ▇▇▇▇▇▇
Media Division
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
SUMITOMO CORPORATION OF AMERICA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Its:▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------
Vice President,
Investment Management
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
DELL USA L.P.
By: Dell Gen. P. Corp.
Its: General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: VP. Business Development
---------------------------
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
CBW/SK DIVINE INVESTMENTS,
a New York general partnership
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, a General Partner
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
