NOW, THEREFORE, in consideration of the above and of the
mutual promises set forth herein, the parties hereto agree that, subject to the
closing of the purchase of the Shares by the Investor pursuant to the Stock
Purchase Agreement, the Company hereby grants to the Investor the rights set
forth below:
Definitions
- Certain
Definitions
Hereafter, in this Agreement the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Registrable Securities" means shares of Common Stock
of the Company held by the Investor which are purchased pursuant to the Stock
Purchase Agreement provided that the Shares have not be sold, assigned,
transferred or pledged by the Investor to any third party (other than affiliates
of the Investor).
The terms "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.
"Registration Expenses" shall mean all expenses, other
than Selling Expenses, incurred by the Company in complying with Section 2
hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company, NASD fees and expenses, and the expense of any special audits
incident to or required by any such registration.
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable to the
securities registered by the Investor and all reasonable fees and disbursements
of counsel for the Investor.
Unless otherwise defined in this Agreement or unless the
context requires otherwise, capitalized terms used herein shall have the same
meaning as in the Stock Purchase Agreement.
Registration Rights
- Company
Registration
- Notice of Registration. If at any time after six
months following the Closing Date the Company shall determine to register any of
its securities, either for its own account or the account of a security holder
or the Investor, other than (i) a registration relating solely to an
acquisition, (ii) a registration relating solely to employee benefit plans,
or (iii) a registration relating solely to a Commission Rule 145
transaction, the Company will:
- promptly, and in any event at least 30 days prior to the
filing of any such registration statement, give to the Investor written notice
thereof; and
- include in such registration and in any underwriting
involved therein, all the Registrable Securities specified in a written request
by the Investor, made within 20 days after receipt of such written notice from
the Company.
- Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Investor as a part of the written
notice given pursuant to Section 2.1(a)(i). In such event the right of the
Investor to registration pursuant to Section 2.1 shall be conditioned upon
the Investor's participation in such underwriting and the inclusion of
Registrable Securities in the underwriting to the extent provided herein. The
Investor shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 2.1, if the managing underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit the Registrable Securities to be included in such
registration. The Company shall so advise the Investor and other shareholders
entitled to include their securities in the registration and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated, (i) first, to the Company, and (ii) second,
among the Investor and such other shareholders entitled to include their
securities in the registration in proportion, as nearly as practicable, to the
respective amounts of shares of Common Stock held the Investor and such other
shareholders at the time of filing the registration statement. To facilitate
the allocation of shares in accordance with the above provisions, the Company
may round the number of shares allocated to any holder of shares of Common Stock
to the nearest 100 shares. If the Investor disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 90 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
- Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section 2.1 prior to the effectiveness of such registration
whether or not the Investor has elected to include securities in such
registration.
- Registration on Form S-
3
- If the Investor requests that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3)
under the Securities Act with respect to shares of the Registrable Securities,
and at the time of such request the Company is a registrant entitled to use
Form S-3 to register the Registrable Securities for such an offering, the
Company shall use its best efforts to cause such Registrable Securities to be
registered for the offering on such form, and (i) thereafter cause the
registration statement to be declared effective by the Commission as to resales
by the Investor; (ii) cause the registration statement to remain effective
for the period ending on the earlier of (i) the date all shares of
Registrable Securities have been sold pursuant thereto or
(ii) 12:00 a.m. EST on the last day of the third calendar year after
the date of effectiveness of the registration statement. The Company shall not
be required to effect such a registration prior to the first anniversary of this
Agreement.
- Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 2.2: (i) if the
Company, within ten (10) days of the receipt of the request of the Investor,
gives notice of its bona fide intention to effect the filing of a registration
statement with the Commission within forty-five (45) days of receipt of such
request in which Registrable Securities will be included (other than with
respect to a registration statement relating to a Rule 145 transaction, an
offering solely to employees or any other registration which is not appropriate
for the registration of Registrable Securities) and the Company files such
registration statement including Registrable Securities within such 45-day
period; or (ii) during the period ending on the date six (6) months
immediately following the effective date of any registration statement
pertaining to securities of the Company in which Registrable Securities were or
could have been included (other than a registration of securities in a
Rule 145 transaction or with respect to an employee benefit plan).
- In addition, the Company shall not be required to take
any action with respect to the registration or the declaration or continuation
of effectiveness of the registration statement (i) during the Company's
customary black-out periods which start the first day of the third calendar
month of any fiscal quarter (March 1, June 1, September 1 and December 1) and
continue until the 2nd trading day following the Company's earning announcement
for the quarter, and (ii) following notice to the Investor from the
Company (a "Suspension Notice") of the existence of any state of facts or the
happening of any event (including, without limitation pending negotiations
relating to, or the consummation of, a transaction, or the occurrence of any
event which in the opinion of the Company might require additional disclosure of
material, non-public information by the Company in the registration statement as
which the Company believes it has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with the published
rules and regulations of the Commission promulgated under the Securities Act or
the 1934 Act, as in effect at any relevant time) which might reasonably result
in (1) the registration statement, any amendment or post-effective
amendment thereto, or any document incorporated therein by reference containing
an untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make the statement therein not
misleading, or (2) the prospectus issued under the registration statement,
any prospectus supplement, or any document incorporated therein by reference
including an untrue statement of material fact or omitting to state a material
fact necessary in order to make the statement therein, in the light of the
circumstances under which they were made, not misleading (provided that for the
continuous thirty (30) day period beginning on the first trading day after the
registration statement is declared effective, no Suspension Notice shall be
issued or in effect with respect to such shares; and the Company shall not issue
a Suspension Notice for any period during which the Company's executive officers
are not similarly restrained from disposing of shares of the Company's Common
Stock). Upon receipt of a Suspension Notice from the Company, the Investor will
forthwith discontinue disposition of all such shares pursuant to the
registration statement until receipt from the Company of copies of prospectus
supplements or amendments prepared by or on behalf of the Company, together with
the notification that the Suspension Notice is no longer in effect, and, if so
directed by the Company, the Investor will deliver to the Company all copies in
their possession of the prospectus covering such shares current at the time of
receipt of any Suspension Notice.
The aggregate number of days that the Company may postpone,
prohibit or suspend any registration or sale of Registrable Securities by the
Investor pursuant to this Section 2.2(c) shall not exceed the number of
days in the Company's customary black-out periods plus thirty (30) days in any
365 day period.
- Expenses of
Registration
All Registration Expenses incurred pursuant to
Sections 2.1 and 2.2 shall be borne by the Company. All Selling Expenses
incurred in connection with securities registered on behalf of the Investor
pursuant to Sections 2.1 and 2.2 shall be borne by the Investor.
- Indemnification
- The Company will indemnify the Investor, each of its
officers and directors and partners, and each person controlling the Investor
within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification or compliance has been effected pursuant to
this Section 2, and each underwriter, if any, and each person who controls
any underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act or any
Rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse the Investor, each of its officers and directors,
and each person controlling the Investor, each such underwriter and each person
who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by the Investor, controlling person or underwriter and stated to
be specifically for use therein.
- The Investor will, if Registrable Securities held by the
Investor are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, and each person who
controls the Company or such underwriter within the meaning of Section 15
of the Securities Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such directors, officers, persons, underwriters or control persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by the Investor and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
the Investor under this subsection (b) and subsection (d) shall be limited
in an amount equal to the net proceeds received by the Investor from sales of
Registrable Securities pursuant to such registration statement, unless such
liability arises out of or is based on willful misconduct by the
Investor.
- Each party entitled to indemnification under this
Section 2.4 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the
failure to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the Indemnifying Party
shall not assume the defense for matters as to which there is a conflict of
interest or separate and different defenses. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
- Investor and the Company agree that if, for any reason,
the indemnification provisions contemplated by Section 2.4(a) or 2.4(b) hereof
are unavailable to or are insufficient to hold harmless and indemnified party in
respect of any all expenses, claims, losses, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such all expenses, claims, losses, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of, and benefits derived by, the indemnifying party and the indemnified
party, 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 a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
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
contributions pursuant to this Section 2.4(d) were determined (i) by
pro rata allocation (even if the Investor or any agents for, or underwriters of,
the Registrable Securities, or all of them, were treated as one entity for such
purpose); or (ii) by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 2.4(d).
The amount paid or payable by an indemnified party as a result of the expenses,
claims, losses, damages or liabilities (or actions in respect thereof) referred
to above shall be deemed to include (subject to the limitations set forth in
Section 2.4(b) hereof) any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action, proceeding or claim. 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.
- Termination of Registration
Rights
The rights granted pursuant to this Agreement
shall terminate at such time as Rule 144 will permit the Investor to sell
all the shares held by it in a single 90 day period or seven (7) years after the
date of this Agreement, whichever occurs first.
- Information by
Holder
The Investor shall furnish to the Company such
information regarding the Investor, the Registrable Securities held by it and
the distribution proposed by the Investor as the Company may reasonably request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 2.
- Rule 144
Reporting
With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
- Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at
all times;
- Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended; and
- So long as the Investor owns any Registrable Securities
to furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said
Rule 144, and of the Securities Act and the Securities Exchange Act of
1934, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as the Investor may
reasonably request in availing itself of any Rule or regulation of the
Commission allowing a Investor to sell any such securities without
registration.
- Transfer of Registration
Rights
The rights to cause the Company to register
securities granted to the Investor under Sections 2.1 and 2.2 may be not be
transferred or assigned, except to any affiliate or affiliates of the Investor
in connection with the transfer or assignment of the related Registrable
Securities to such affiliate or affiliates.
- Obligations of the
Company
Whenever required under this Section 2 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
- Prepare and file with the Commission a registration
statement with respect to such securities and use its diligent best efforts to
cause such registration statement to become effective and to keep such
registration statement effective for such period of time as otherwise specified
in this Agreement.
- Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
- Furnish to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
- Use its reasonable commercial efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Investor, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
- In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The Investor
shall also enter into and perform its obligations under such an
agreement.
- Notify the Investor when an amended prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
- Furnish, at the request of the Investor, on the date that
such securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 2, if such securities are being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) a copy of the opinion given to
the underwriters if the registration of the Investor's securities was
underwritten and (ii) a letter dated such date, from the independent
accountants of the Company, in form and substance as is customarily given by
independent accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Investor requesting
registration of securities.
Other Rights
- Board
Representation
Effective as of the date of the Closing, the
Company will cause a designee of the Investor to be appointed to the Board of
Directors of the Company. For so long as the Investor owns at least ten percent
(10%) of the outstanding shares of Common Stock, the Investor shall have the
right to nominate one director to the Board of Directors of the Company at each
election of directors. Such right shall be in addition to any other voting
rights that the Investor may have, from time to time, with respect to its shares
of Common Stock. The Company shall include as a nominee for the Board of
Directors recommended by the Board of Directors the person designated by the
Investor in accordance with this section and shall nominate such person and use
its reasonable best efforts to cause the election of such person, unless the
Board of Directors, in the exercise of its fiduciary duties, reasonably shall
determine that such person is not qualified to serve on the Board of Directors.
If the Board of Directors reasonably determines that such designee is not so
qualified, the Investor shall have the opportunity to specify one additional
designee who shall be so included as a nominee subject to the qualification set
forth in the immediately preceding sentence. In the event that a vacancy is
created at any time by the death, disability, resignation or removal of a
director nominated by the Investor, the Investor shall have the right to
designate a replacement director to fill such vacancy (provided that the
Investor would be entitled at that time to nominate a director pursuant to this
section) and the Company agrees to take such actions within its control as are
necessary to implement the agreements set forth in this sentence.
- Preemptive Rights
- If the Company authorizes the offer or sale of any shares
of Common Stock ("New Shares") or of options or rights to acquire shares
of Common Stock ("New Rights"), (i) in a private placement, then the
Company shall first offer to the Investor the number of such New Shares or New
Rights equal to the product of (A) the total number of such New Shares or New
Rights and (B) a fraction, the numerator of which shall be the number of shares
of Common Stock then owned by the Investor at such time and the denominator of
which shall be the total number of shares of Common Stock issued and outstanding
at such time. The Investor shall be entitled to purchase all of a portion of
the New Shares or New Rights offered to it at the same price and on the same
terms and conditions as such New Shares or New Rights are to be offered to any
other persons or entities. The Investor must exercise its purchase rights
hereunder within 20 days after written notice from the Company describing in
reasonable detail the New Shares or New Rights being offered, the purchase price
thereof and the payment terms thereof.
- During the 90 days following the expiration of the
offering period described above, the Company shall be free to sell any New
Shares or New Rights that the Investor has not elected to purchase on terms and
conditions no more favorable to the purchasers thereof than those offered to the
Investor. If any New Shares or New Rights are not sold during such 90-day
period in accordance with this Section 3.2(b), then the provisions of this
Section 3.2 shall automatically and immediately be reinstated, and shall
automatically and immediately reapply to the offer or sale of such New Shares or
New Rights.
- With respect to public offerings of Common Stock, the
parties will cooperate to allow the Investor to purchase its pro rata portion of
the shares of Common Stock offered in such offering unless in the good faith
judgment of the Board of Directors of the Company, after consultation with their
legal advisors and the underwriters for such offering, including the Investor is
such offering would be reasonably likely to negatively affect the pricing of,
costs associated with, the timing of or the risk of consummation of such
offering. To the extent that the Investor has not been able to participate in a
public offering, the Investor shall be permitted to purchase additional shares
of Common Stock until its ownership percentage of the outstanding shares of
Common Stock is equal to its ownership percentage prior to such
offering.
- The provisions of this Section 3.2 shall not apply to the
issuance and sale of New Shares or New Rights to employees, officers or
directors of the Company pursuant to an employee benefits plan.
- The rights of the Investor under this Section 3.2 may be
waived in writing in any specific instance by the Investor.
- The rights of the Investor under this Section 3.2
shall terminate on the later of (i) such date when the amount of Common
Stock held by the Investor is less than 10% of the outstanding capital stock of
the Company, and (ii) three years from the Closing Date.
- Nasdaq
Listing
The Company agrees to make application to the
Nasdaq Stock Market National Market for the listing of the Shares.
Miscellaneous
- Governing Law
This Agreement shall be governed and construed in
all respects in accordance with the laws of the State of California as applied
to agreements made and performed in California by residents of the State of
California.
- Entire Agreement;
Amendment
This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof, and no party shall be liable or bound to any other party in any manner
by any warranties, representations or covenants except or specifically set forth
herein. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
- Notices, etc
All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed as follows:
- if to the Investor:
Technoparc du pays de Gex
165 Rue Edouard Branly
B.P. 112 01637
ST GENIS POUILLY CEDEX (France)
Attention: General Counsel;
with a copy to:
Michael J. Coleman, Esq.
Shearman & Sterling
555 California Street
20th Floor
San Francisco, CA 94104
- if to the Company:
Paul Voois, CEO
8x8, Inc.
2445 Mission College Blvd.
Santa Clara, CA 95054
or by facsimile to:
Paul Voois, CEO
8x8, Inc.
(408) 933-0234
with a copy to:
Blair W. Stewart, Esq.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.
- Severability
In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
- Titles and
Subtitles
The titles and subtitles used in this Agreement
are used for convenience only and are not considered in construing or
interpreting this Agreement.
- Counterparts
This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
