Registration Rights Agreement - Micron Electronics Inc., Interland Inc., Micron Technology Inc., Ken Gavranovic and Waldemar Fernandez
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is entered into as of August 6, 2001 by and between Micron
Electronics, Inc., a Minnesota corporation ("COMPANY"), Interland, Inc., a
Georgia corporation ("INTERLAND"), Micron Technology, Inc. ("MTI"), Ken
Gavranovic and Waldemar Fernandez (the "INTERLAND FOUNDERS"), and the parties
set forth on Exhibit A attached hereto (the "OTHER HOLDERS") (with MTI, the
Interland Founders, and the Other Holders being collectively referred to as the
"HOLDERS").
RECITALS
WHEREAS, on the date hereof, MTI has acquired approximately 60% of the
outstanding Common Stock of Company;
WHEREAS, on the date hereof, the Interland Founders and Other Holders
have acquired shares of Common Stock of Interland (the "INTERLAND COMMON
STOCK"), from Interland pursuant to various agreements between Interland and
certain of the Holders (the "STOCK ACQUISITION AGREEMENTS");
WHEREAS, Company, Interland, and Interland Acquisition Corporation, a
Delaware corporation and wholly owned first tier subsidiary of the Company
("MERGER SUB") have entered into an Agreement and Plan of Merger (the "MERGER
AGREEMENT") dated as of even date hereof, pursuant to which Merger Sub will
merge with and into Interland in a reverse triangular merger with Interland to
be the surviving corporation of the Merger (the "MERGER");
WHEREAS, certain of the Other Holders possess registration rights to
Interland Common Stock pursuant to that certain Registration Rights Agreement by
and between the Other Holders and Interland dated as of December 2, 1999, as
amended on December 24, 1999, and on March 15, 1999, and on May 8, 2000 (the
"PRIOR AGREEMENT");
WHEREAS, each of CPQ Holdings, Inc. ("CPQ") and Hewlett-Packard Company
("HP") possess registration rights to Interland Common Stock pursuant to
Registration Rights Agreements by and between Interland and each of CPQ and HP
dated as of June 30, 2000 (the "CQP/HP AGREEMENTS");
Whereas, the Interland Founders possess registration rights pursuant to
that certain Separation Agreement and General Release dated Nov. 19, 1999, by
and between Interland and Waldemar Fernandez;
WHEREAS, in connection with the Merger, Company desires to grant to
Holders certain registration rights with respect to the shares of the Company
Common Stock that are issued to Holders in the Merger (the "MERGER SHARES"), and
that are currently held by MTI (the "MTI SHARES"), subject to the terms and
conditions set forth in this Agreement and the parties to the Prior Agreement
and the CPQ/HP Agreements desire to terminate each of the Prior Agreement
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and the CPQ/HP Agreements and to accept the rights created pursuant hereto in
lieu of the rights granted to them under the Prior Agreement and the CPQ/HP
Agreements;
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Section 2 hereof, however capitalized terms used
but not defined herein shall have the meanings set forth in the Merger
Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto agree
as follows:
1. REGISTRATION RIGHTS.
1.1. Demand Registration Rights of Initiating Holders.
1.1.1. Request.
At any time after the Effective Time contemplated in the Merger
Agreement, the Initiating Holders (other than CPQ and HP) may request
registration for sale under the Act of all or part of the Registrable Securities
then held by them, provided that such requested registration relates to a number
of shares of Registrable Securities which represents at least 25% of the total
number of shares of Registrable Securities (or a lesser percentage if the
anticipated aggregate offering price would exceed $5 million), and upon such
request the Company will promptly take the actions specified in Section 1.1.2.
Notwithstanding anything contained in this Section 1.1 to the contrary, neither
CPQ nor HP shall posses and demand registration rights pursuant to this Section
1.1.
1.1.2. Demand Procedures.
Within ten (10) Business Days after receipt by the Company of a
registration request under Section 1.1.1 (which request shall specify the number
of shares proposed to be registered and sold and the manner in which such sale
is proposed to be effected), the Company shall promptly give written notice to
all other Holders of the proposed demand registration, and such other Holders
shall have the right to join in the proposed registration and sale, upon written
request to the Company (which request shall specify the number of shares
proposed to be registered and sold) within five (5) Business Days after receipt
of such notice from the Company. The Company shall thereafter, as expeditiously
as practicable (i) file with the SEC under the Act a registration statement on
the appropriate form concerning all Registrable Securities specified in the
demand request and all Registrable Securities with respect to which the Company
has received the written request from the other Holders and (ii) use its
reasonable efforts to cause the registration statement to be declared effective.
At the request of the Initiating Holders requesting registration, the Company
shall use its reasonable efforts to cause each offering pursuant to Section
1.1.1 to be managed, on a firm commitment basis, by a recognized regional or
national underwriter selected by the Initiating Holders and approved by the
Company, such approval not to be unreasonably withheld. All holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form. The Company shall not be obligated to
effect more than two registrations requested by Initiating Holders under
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Section 1.1.1, provided, however, that each such request shall be deemed
satisfied only when a registration statement covering all Registrable Securities
specified in notices received as aforesaid, for sale in accordance with the
method of disposition specified by the Initiating Holders, has become effective
and, if the method of disposition is a firm commitment underwritten public
offering, at least 75% of the Registrable Securities covered thereby shall have
been sold pursuant thereto. Except for registration statements on Form S-4, S-8
or another form not available for registering securities for sale to the public,
or any successor thereto, the Company will not, without the consent of the
Holders selling a majority of the Registrable Securities in such offering
pursuant to this Section 1.1, file with the SEC any other registration statement
with respect to its Common Stock, whether for its own account or that of other
shareholders, from the date of receipt of a notice from requesting Holders
pursuant to this Section 1.1 until the completion of the period of distribution
of the securities contemplated thereby as provided in Section 1.4; provided,
however, that the Company may include securities offered by the Company for its
own account and/or other securities of the Company that are held by shareholders
other than the Holders in such offering pursuant to this Section 1.1, subject to
reduction as provided in Section 1.1.4 of this Agreement.
1.1.3. Delay by Company.
The Company shall not be required to proceed to effect a demand
registration under the Act pursuant to Section 1.1.1 above if (i) the Company
receives a request for registration under Section 1.1.1 less than 90 days
preceding the anticipated effective date of a proposed underwritten public
offering of securities of the Company approved by the Company's Board of
Directors prior to the Company's receipt of the request; (ii) within 180 days
prior to any such request for registration, a registration of securities of the
Company has been effected in which the Initiating Holders had the right to
participate pursuant to this Section 1.1 or Section 1.2 hereof; or (iii) the
Board of Directors of the Company reasonably determines in good faith that
effecting such a demand registration at such time would have a material adverse
effect upon a proposed sale of all (or substantially all) of the assets of the
Company, or a merger, share exchange, reorganization, recapitalization, or any
other form of business combination or transaction materially affecting the
capital structure, or equity ownership of the Company, or would otherwise be
seriously detrimental to the Company because the Company was then in the process
of raising capital in the public or private markets; provided, however, that the
Company may only delay a demand registration pursuant to this Section 1.1.3 for
a period not exceeding 90 days (or until such earlier time as such transaction
is consummated or no longer proposed) and may only defer any such filing
pursuant to this Section 1.1.3 once per calendar year. The Company shall
promptly notify in writing the Holders requesting registration of any decision
not to effect any such request for registration pursuant to this Section 1.1.3,
which notice shall set forth in reasonable detail the reason for such decision
and shall include an undertaking by the Company promptly to notify such Holders
as soon as a demand registration may be effected.
1.1.4. Reduction.
If a demand registration is an underwritten registration and the
managing underwriters advise the Company and the Holders participating in the
demand registration in writing that in their opinion the number of shares of
Common Stock requested to be included in
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such registration exceeds the number which can be sold in such offering, then
the Company shall include in such demand registration (i) first, the shares
proposed to be sold by MTI exercising rights under Section 1.1.1, (ii) second,
the shares proposed to be sold by all the Other Holders exercising rights under
Section 1.1.1, allocated pro rata among such Other Holders in proportion to the
number of Registrable Securities owned by them, and (iii) third, the shares
proposed to be sold by the Company.
1.1.5. Withdrawal.
Holders participating in any demand registration pursuant to this
Section 1.1 may withdraw at any time before a registration statement is declared
effective, and the Company may withdraw such registration statement if no
Registrable Securities are then proposed to be included (and if withdrawn by the
Company the Holders shall not be deemed to have requested a demand registration
for purposes of Section 1.1.1 hereof). If the Company withdraws a registration
statement under this Section 1.1.5 in respect of a registration for which the
Company would otherwise be required to pay expenses under Section 1.6.2 hereof,
the Holders that shall have withdrawn shall reimburse the Company for all
expenses of such registration in proportion to the number of shares each such
withdrawing Holder shall have requested to be registered. Notwithstanding the
foregoing, however, if at the time of the withdrawal, the Holders have learned
of a material adverse change in the condition, business or prospects of the
Company from that known to the Holders at the time of their request, then the
Holders shall not be required to pay any of said registration expenses and the
Company shall be deemed not to have effected a registration pursuant to Section
1.1.2 of this Agreement.
1.2. Piggyback Registration Rights.
1.2.1. Request.
If at any time or times after the date of this Agreement the
Company proposes to make a registered public offering of any of its securities
under the Act (whether to be sold by it or by one or more selling shareholders),
other than an offering pursuant to a demand registration under Section 1.1.1 or
Section 1.3 hereof or an offering registered on Form S-8 or Form S-4, or
successor forms relating to employee stock plans and business combinations, the
Company shall, not less than 20 days prior to the proposed filing date of the
registration form, give written notice of the proposed registration to all
Holders specifying in reasonable detail the proposed transaction to be covered
by the registration statement, and at the written request of any Holder
delivered to the Company within 20 days after giving such notice, shall include
in such registration and offering, and in any underwriting of such offering, all
Registrable Securities as may have been designated in the Holder's request. The
Company shall have no obligation to include shares of Common Stock owned by any
Holder in a registration statement pursuant to this Section 1.2, unless and
until such Holder (a) in connection with any underwritten offering, agrees to
enter into an underwriting agreement, a custody agreement and power of attorney
and any other customary documents required in an underwritten offering all in
customary form and containing customary provisions (but not requiring any Holder
to provide indemnification or contribution more extensive than is set forth in
Section 1.6.3 hereof) and (b) shall have furnished the Company with all
information and statements about or pertaining to such Holder in such
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reasonable detail and on such timely basis as is reasonably deemed by the
Company to be legally required with respect to the preparation of the
registration statement.
1.2.2. Reduction.
If a registration in which any Holder has the right to
participate pursuant to this Section 1.2 is an underwritten registration, and
the managing underwriters advise the Company in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering, the Company shall include in such
registration (i) first, the securities of the Company proposed to be sold by the
Company, (ii) second, the shares proposed to be sold by MTI exercising rights
under Section 1.2.1, (iii) third, the shares proposed to be sold by Other
Holders (other than the shares held by CPQ and HP) exercising rights under
Section 1.2.1, allocated pro rata among such Other Holders (other than CPQ and
HP) in proportion to the number of Registrable Securities owned by them, (iv)
fourth, the shares proposed to be sold by CPQ and HP exercising rights under
Section 1.2.1, (v) fifth, the Interland Founders exercising rights under Section
1.2.1 on an equal basis in proportion to the number of Registrable Securities
owned by them, and (vi) sixth, by any other shareholders proposing to sell
shares of Common Stock pursuant to such registration.
1.3. Registration on Form S-3.
Subject to the limitations set forth in Section 1.1.3, if at any
time the Company is eligible to use Form S-3 (or any successor form) for
secondary sales any Holder may request (by written notice to the Company stating
the number of Registrable Securities proposed to be sold and the intended method
of disposition) that the Company file a registration statement on Form S-3 (or
any successor form) for a public sale of all or any portion of the Registrable
Securities beneficially owned by it (which may include a "shelf" registration
under Rule 415 under the Act, or any successor rule), provided that the
reasonably anticipated aggregate price to the public of such Registrable
Securities shall be at least $2.5 million. Upon receiving such request, the
Company shall use its reasonable best efforts to promptly file a registration
statement on Form S-3 (or any successor form) to register under the Act for
public sale in accordance with the method of disposition specified in such
request, the number of shares of Registrable Securities specified in such
request and shall otherwise carry out the actions specified in Section 1.1.2 and
1.4. The Company shall not be obligated to file more than two registration
statements on Form S-3 (or any successor form) pursuant to this Section 1.3
within any eighteen month period. Notwithstanding anything contained in this
Section 1.3 to the contrary, neither CPQ nor HP shall possess any registration
rights pursuant to this Section 1.3.
1.4. Registration Procedures. Whenever any Holder has requested that
any shares of Common Stock be registered pursuant to Sections 1.1, 1.2 or 1.3
hereof, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with
respect to such shares and use its reasonable best efforts to cause such
registration statement to become effective as soon as reasonably practicable
thereafter (provided that before filing a registration statement or prospectus
or any amendments or supplements thereto, the Company shall furnish counsel for
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such Holder with copies of all such documents proposed to be filed) and to cause
such registration statement to comply as to form and content in all material
respects with the SEC's forms, rules and regulations;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period of
not less than 120 days (2 years in the case of a registration pursuant to
Section 1.3 hereof) or until such Holder has completed the distribution
described in such registration statement, whichever occurs first;
(c) furnish to such Holder such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus),
and such other documents as such Holder may reasonably request;
(d) use its reasonable efforts to register or qualify such shares
under such other securities or blue sky laws of such jurisdictions as such
Holder requests (and to maintain such registrations and qualifications effective
for a period of 120 days (2 years in the case of a registration pursuant to
Section 1.3 hereof) or until such Holder has completed the distribution of such
shares, whichever occurs first), and to do any and all other acts and things
which may be necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of such shares (provided that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not be required but for this subsection (4), (ii) subject itself
to taxation in any such jurisdiction, or (iii) file any general consent to
service of process in any such jurisdiction); provided that, notwithstanding
anything to the contrary in this Agreement with respect to the bearing of
expenses, if any such jurisdiction shall require that expenses incurred in
connection with the qualification of such shares in that jurisdiction be borne
in part or full by such Holder, then such Holder shall pay such expenses to the
extent required by such jurisdiction;
(e) notify such Holder, at any time when a prospectus relating
thereto is required to be delivered under the Act within the period that the
Company is required to keep the registration statement effective, of the
happening of any event as a result of which the prospectus included in any such
registration statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading, and promptly
prepare, file and furnish to the Holder a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such shares,
such prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or, in light of the
circumstances then existing, necessary to make the statements therein not
misleading;
(f) cause all such shares to be listed on securities exchanges,
if any, on which similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all such shares
not later than the effective date of such registration statement;
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(h) enter into such customary agreements and take all such other
actions as such Holder reasonably requests (and subject to its reasonable
approval) in order to expedite or facilitate the disposition of such shares;
(i) make available for inspection by such Holder, by any
underwriter participating in any distribution pursuant to such registration
statement, and by any attorney, accountant or other agent retained by such
Holder or by any such underwriter, all financial and other records, pertinent
corporate documents, and properties (other than confidential intellectual
property) of the Company;
(j) if the offering is underwritten and at the request of any
seller of Registrable Securities, use its best efforts to furnish on the date
that Registrable Securities are delivered to the underwriters for sale pursuant
to such registration: (i) an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters and
to such seller, stating that such registration statement has become effective
under the Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act, (B)
the registration statement, the related prospectus and each amendment or
supplement thereof comply as to form in all material respects with the
requirements of the Act (except that such counsel need not express any opinion
as to financial statements or other financial or statistical data contained
therein), (C) to such other customary matters as reasonably may be requested by
counsel for the underwriters or by such seller or its counsel and (D) (not an
opinion but as a negative assurance) that to the best knowledge of such counsel,
such registration statement does not contain a material misrepresentation or
omission to state a material fact necessary to make the statements therein not
misleading; and (ii) a letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters and to such
seller, stating that they are independent public accountants within the meaning
of the Act and that, in the opinion of such accountants, the financial
statements of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the Act, and
such letter shall additionally cover such other financial matters (including
information as to the period ending no more than five business days prior to the
date of such letter) with respect to such registration as such underwriters
reasonably may request; and
(k) in connection with an underwritten offering pursuant to a
registration statement filed pursuant to Section 1.1 hereof, enter into an
underwriting agreement in customary form and containing customary provisions,
including provisions for indemnification of underwriters and contribution, if so
requested by any underwriter.
1.5. Holdback Agreement.
(a) Notwithstanding anything in this Agreement to the contrary,
if after any registration statement to which the rights hereunder apply becomes
effective (and prior to completion of any sales thereunder), the Board of
Directors determines in good faith that the failure of the Company to (i)
suspend sales of stock under the registration statement or (ii) amend or
supplement the registration statement, would have a material adverse effect on
the Company,
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the Company shall so notify each Holder participating in such registration and
each Holder shall suspend any further sales under such registration statement
until the Company advises the Holder that the registration statement has been
amended or that conditions no longer exist which would require such suspension,
provided that the Company may impose any such suspension for no more than 30
days and no more than 2 times during any twelve month period.
(b) In the event that the Company effects a registration of any
securities under the Act in an underwritten public offering, each Holder agrees
not to effect any sale, transfer, disposition or distribution, including any
sale pursuant to Rule 144 under the Act, of any Equity Securities (except as
part of such offering) during the 90-day period commencing with the effective
date of the registration statement for any public offering, provided that all
officers, directors and holders of 5% or more of the Company's outstanding
voting securities enter into agreements providing for similar restrictions on
sales.
1.6. Registration Expenses.
1.6.1. Holder Expenses.
If, pursuant to Sections 1.1, 1.2 or 1.3 hereof, Registrable
Securities are included in a registration statement, then the Holder thereof
shall pay all transfer taxes, if any, relating to the sale of its shares, and
any underwriting discounts or commissions or the equivalent thereof applicable
to the sale of its shares.
1.6.2. Company Expenses.
Except for the fees and expenses specified in Section 1.6.1
hereof and except as provided below in this Section 1.6.2, the Company shall pay
all expenses incident to the registration of shares by the Company and any
Holders pursuant to Sections 1.1, 1.2 or 1.3 hereof, and to the Company'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, underwriting discounts, fees and expenses (other
than any Holder's portion of any underwriting discounts or commissions or the
equivalent thereof), printing expenses, messenger and delivery expenses, and
fees and expenses of counsel for the Company and a single counsel for all
Holders selling shares (the fees of such counsel not to exceed $20,000 and not
to exceed $5,000 in connection with a shelf registration pursuant to Section 1.3
hereof; provided that in the case of registrations of shares pursuant to Section
1.2 hereof, the Company shall not be responsible for counsel fees of more than
$50,000 in the aggregate for all such registrations pursuant to Section 1.2
hereof) and all independent certified public accountants and other persons
retained by the Company.
1.6.3. Indemnity and Contribution.
(a) In the event that any shares owned by a Holder are
proposed to be offered by means of a registration statement pursuant to Sections
1.1, 1.2 or 1.3 hereof, to the extent permitted by law, the Company agrees to
indemnify and hold harmless such Holder, any underwriter participating in such
offering, each officer, partner, manager and director of such
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person, each person, if any, who controls or may control such Holder or
underwriter within the meaning of the Act and each representative of any Holder
serving on the Board of Directors of the Company (such Holder or underwriter,
its officers, partners, managers, directors and representatives, and any such
other persons being hereinafter referred to individually as an "INVESTOR
INDEMNIFIED PERSON" and collectively as "INVESTOR INDEMNIFIED PERSONS") from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs, and expenses, including, without limitation,
interest, penalties, and attorneys' fees and disbursements, asserted against,
resulting to, imposed upon or incurred by such Investor Indemnified Person,
directly or indirectly (hereinafter referred to in this Section 1.6.3 in the
singular as a "claim" and in the plural as "claims"), based upon, arising out of
or resulting from any breach of representation or warranty made by the Company
in any underwriting agreement or any untrue statement or alleged untrue
statement of a material fact contained in the registration statement or any
omission or alleged omission to state therein a material fact necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading, except insofar as such claim is based upon, arises
out of or results from information furnished to the Company in writing by such
Investor Indemnified Person for use in connection with the registration
statement.
(b) In the event that any shares owned by a Holder are
proposed to be offered by means of a registration statement pursuant to Sections
1.1, 1.2 or 1.3 hereof, to the extent permitted by law, each such Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
officer of the Company who signs the Registration Statement, each director of
the Company, any underwriter participating in such offering, and each person, if
any, who controls or may control the Company or such underwriter within the
meaning of the Act (the Company, such officers and directors of the Company,
such underwriter, and any such other persons also being hereinafter referred to
individually as a "COMPANY INDEMNIFIED PERSON" and collectively as "COMPANY
INDEMNIFIED PERSONS") from and against all claims based upon, arising out of or
resulting from any untrue statement or alleged untrue statement of a material
fact contained in the registration statement or any omission or alleged omission
to state therein a material fact necessary in order to make the statement made
therein, in the light of the circumstances under which they were made, not
misleading, but only to the extent that such claim is based upon, arises out of
or results from information furnished to the Company in writing by such Holder
explicitly for use in connection with the registration statement; provided,
however, that a Holder shall be under no obligation to indemnify or hold
harmless any Company Indemnified Persons with respect to any amount in excess of
the net cash proceeds paid to such Holder in connection with any sales of
securities effected under such registration statement.
(c) The indemnification provisions set forth herein shall
be in addition to any liability the Company or any Holder may otherwise have to
the Investor Indemnified Persons or Company Indemnified Persons. The Company
Indemnified Persons and the Investor Indemnified Persons are hereinafter
referred to as Indemnified Persons. Promptly after receiving notice of any claim
in respect of which an Indemnified Person may seek indemnification under this
Section 1.6.3, such Indemnified Person shall submit written notice thereof to
either the Company or the Holders, as the case may be (sometimes being
hereinafter referred to as an "Indemnifying Person"). The omission of the
Indemnified Person so to notify the Indemnifying Person of any such claim shall
not relieve the Indemnifying Person from any liability it may have
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hereunder except to the extent that (a) such liability was caused or increased
by such omission, or (b) the ability of the Indemnifying Person to reduce such
liability was materially adversely affected by such omission. In addition, the
omission of the Indemnified Person so to notify the Indemnifying Person of any
such claim shall not relieve the Indemnifying Person from any liability it may
have otherwise than hereunder. The Indemnifying Person shall have the right to
undertake, by counsel or representatives of its own choosing, the defense,
compromise or settlement (without admitting liability of the Indemnified Person)
of any such claim asserted, such defense, compromise or settlement to be
undertaken at the expense and risk of the Indemnifying Person, and the
Indemnified Person shall have the right to engage separate counsel, at its own
expense, whom counsel for the Indemnifying Person shall keep informed and
consult with in a reasonable manner; provided, however, if the defendants in any
such action include both the Indemnified Person and the Indemnifying Person and
the Indemnified Person shall have reasonably concluded that there may be a
conflict between the positions of the Indemnifying Person and the Indemnified
Person in conducting the defense of any such action or that there may be legal
defenses available to it and/or other Indemnified Persons which are different
from or additional to those available to the Indemnifying Person, the
Indemnified Person shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action
on behalf of the Indemnified Person at the expense of the Indemnifying Person.
In the event the Indemnifying Person shall elect not to undertake such defense
by its own representatives, the Indemnifying Person shall give prompt written
notice of such election to the Indemnified Person, and the Indemnified Person
shall undertake the defense, compromise or settlement (without admitting
liability of the Indemnified Person) thereof on behalf of and for the account
and risk of the Indemnifying Person by counsel or other representatives
designated by the Indemnified Person. Notwithstanding the foregoing, no
Indemnifying Person shall be obligated hereunder with respect to amounts paid in
settlement of any claim if such settlement is effected without the consent of
such Indemnifying Person (such consent not to be unreasonably withheld).
(d) If the indemnification provided for in this Section
1.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Person, then the Indemnifying Person, in lieu of indemnifying such
Indemnified Person hereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of any losses or claims in such proportion
as is appropriate to reflect the relative fault of the Indemnified Person on the
one hand and the Indemnifying Person on the other in connection with the
statements or omissions that resulted in such losses or claims as well as any
other relevant equitable considerations. The relative fault of the Indemnified
Person and the Indemnifying Person shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Person or by the Indemnified Person and
the parties' relative intent, knowledge and access to information and
opportunity to correct or prevent such statement or omission. In no event will
the liability of any Holder for contribution exceed the net proceeds received by
such Holder in any sale of securities to which such liability relates.
1.7. Grant and Transfer of Registration Rights.
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Except for registration rights granted by the Company after the
date hereof (a) in connection with business acquisitions and which relate solely
to registrations on Form S-3 or (b) which are subordinate to the rights of the
Holders hereunder, the Company shall not grant any registration rights to any
other person or entity without the prior written consent of the Initiating
Holders, which consent shall not be unreasonably withheld or delayed. Holders
shall have the right to transfer or assign the rights contained in this
Agreement (i) to any limited partner or affiliate of a Holder in connection with
the transfer of any Registrable Securities or (ii) to any third party transferee
acquiring at least 20% of the Registrable Securities issued to the Holder as of
the date hereof or the shares of Common Stock issued upon conversion of such
Registrable Securities; provided: (a) the Company is, within thirty (30) days
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement; and (c) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.
1.8. Information From Holder.
It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
1.9. Changes in Common Stock.
If there is any change in the Common Stock by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the rights
and privileges granted hereby shall continue with respect to the Common Stock as
so changed.
1.10. Rule 144 Reporting.
With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Act, at all times after the effective date of the first
registration under the Act filed by the Company for an offering of its
securities to the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Act and the Exchange Act; and
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(c) So long as a Holder owns any Registrable Securities, furnish
to such Holder forthwith upon request: a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 of the Act, and
of the Exchange Act (at any time after it has become subject to such reporting
requirements); a copy of the most recent annual or quarterly report of the
Company; and such other reports and documents as a Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing it to sell any
such securities without registration.
2. DEFINITIONS.
The capitalized terms contained in this Agreement shall have the
following meanings unless otherwise specifically defined:
"ACT" shall mean the Securities Act of 1933, as amended.
"AGREEMENT" shall mean this Registration Rights Agreement.
"BUSINESS DAY" shall mean Monday through Friday and shall exclude any
federal or bank holidays observed in New York City.
"COMMON STOCK" shall mean the common stock of the Company, no par value
per share.
"EFFECTIVE TIME" shall mean the time of the filing of the certificate of
merger between Interland and Merger Sub with the Secretary of State of
the State of Delaware in accordance with the relevant provisions of
Delaware Law (or such later time as may be agreed in writing by
Interland and Company).
"EQUITY SECURITIES" shall mean the Common Stock, and any warrants or
other rights to subscribe for or to purchase, or any options for the
purchase of, Common Stock, any stock or security convertible into or
exchangeable for Common Stock or any other stock, security or interest
in the Company whether or not convertible into or exchangeable for
Common Stock.
"HOLDERS" shall mean MTI, the Interland Founders, the Other Holders, and
any other person or entity that is a valid transferee of the rights
granted hereunder pursuant to Section 1.7 hereof.
"INTERLAND" shall mean Interland, Inc., a Georgia corporation.
"INDEMNIFIED PERSON" shall have the meaning ascribed to that term in
Section 1.6.3.
"INDEMNIFYING PERSON" shall have the meaning ascribed to that term in
Section 1.6.3.
"INITIATING HOLDERS" shall mean MTI and those Other Holders who in the
aggregate beneficially own not less than 50% of the Registrable
Securities.
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"MERGER" shall mean the merger of Merger Sub with and into Interland in
a reverse triangular merger with Interland to be the surviving
corporation at the Effective Time, pursuant to the Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger dated of
even date herewith, between Company, Merger Sub, and Interland.
"MERGER SHARES" shall mean those shares of the Common Stock of Company
issued to the shareholders of Interland in the Merger.
"MTI" shall mean Micron Technology, Inc., a Delaware corporation.
"MTI SHARES" shall mean those shares of the Common Stock of Company
beneficially owned by MTI.
"OTHER HOLDERS" shall mean those persons that are listed on Exhibit A
attached hereto.
"COMPANY" shall mean Micron Electronics, Inc., a Minnesota corporation,
or any successor thereto.
"REGISTRABLE SECURITIES" shall mean (i) those shares of Company Common
Stock beneficially owned by MTI, (ii) those shares of Company Common
Stock issued in exchange for those shares of Interland Common Stock held
by the Interland Founders and Other Holders upon the Effective Time of
the Merger, (iii) the shares of Company Common Stock issued to CPQ and
HP upon the exercise of their warrants to acquire Company Common Stock
and (iv) any equity securities issued as a distribution with respect to
or in exchange for or in replacement for any of the shares referred to
in clauses (i), (ii) or (iii); provided, however, that Registrable
Securities shall not include any securities that have been previously
sold pursuant to a registration statement filed under the Act or under
Rule 144 promulgated under the Act, or which have otherwise been
transferred in a transaction in which the transferor's rights under this
Agreement are not assigned or are not subject to transfer restrictions
under the Act or applicable state securities laws.
"SEC" shall mean the Securities and Exchange Commission, or any other
federal agency at the time administering the Act.
3. MISCELLANEOUS.
3.1. Entire Agreement; Amendment.
This Agreement constitutes the entire agreement among the parties
hereto with respect to the matters provided for herein, and it supersedes all
prior oral or written agreements, commitments or understandings with respect to
the matters provided for herein, including the Prior Agreement. This Agreement
may not be amended without the written consent of the Company and the Initiating
Holders. Each Holder agrees that this Agreement may be amended
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<PAGE>
by the written consent of (i) the Company and (ii) the Other Holders who in the
aggregate beneficially own not less than 50% of the Registrable Securities, as
defined herein.
3.2. Waiver.
No delay or failure on the part of any party hereto in exercising
any right, power or privilege under this Agreement or under any other
instruments given in connection with or pursuant to this Agreement shall impair
any such right, power or privilege or be construed as a waiver of any default or
any acquiescence therein. No single or partial exercise of any such right, power
or privilege shall preclude the further exercise of such right, power or
privilege, or the exercise of any other right, power or privilege. No waiver
shall be valid against any party hereto unless made in writing and signed by the
party against whom enforcement of such waiver is sought and then only to the
extent expressly specified therein.
3.3. No Third Party Beneficiaries.
Except to the extent that the rights hereunder are assigned in
accordance with Section 1.7, it is the explicit intention of the parties hereto
that no person or entity other than the parties hereto is or shall be entitled
to bring any action to enforce any provision of this Agreement against any of
the parties hereto, and the covenants, undertakings and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
3.4. Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
3.5. Governing Law.
This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of Delaware (excluding the choice of law rules
thereof).
3.6. Notices.
All notices, demands, requests, or other communications which may
be or are required to be given, served, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand-delivered, sent
by overnight courier service or mailed by first-class, registered or certified
mail, return receipt requested, postage prepaid, or transmitted by facsimile,
addressed as follows:
(i) If to the Company:
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Micron Electronics, Inc.
900 E. Karcher Road
Nampa, ID 83687-3045
Attention: Joel J. Kocher
Facsimile No.: (208) 898-3424
with a copy (which shall not constitute notice) to:
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attention: Dennis R. DeBroeck
Facsimile No.: (650) 494-1417
(ii) If to the Interland:
Interland, Inc.
101 Marietta Street, Suite 200
Atlanta, GA 30303
Attention: Ken Gavranovic
Facsimile No.: (404) 720-3707
with a copy (which shall not constitute notice) to:
Kilpatrick Stockton LLP
1100 Peachtree Street, Suite 2800
Atlanta, GA 30309-4530
Attention: David A. Stockton
Facsimile No.: (404) 815-6555
(iii) if to MTI, to:
Micron Technology, Inc.
8000 S. Federal Way
Boise, ID 83712
Attention: Wilbur G. Stover
Facsimile No.: (208) 368-4242
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94306
Attention: John Fore
Facsimile No.: (650) 493-6811
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<PAGE>
(iv) If to the Other Investors, then to the names and addresses
set forth on the books and records of the Company after
the Merger.
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand-delivered,
mailed, transmitted or telecopied in the manner described above, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at such
time as it is delivered to the addressee (with the return receipt, the delivery
receipt, or the answerback being deemed conclusive, but not exclusive, evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.
3.7. Execution in Counterparts.
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Registration Rights Agreement to be duly executed on their
behalf, as of the day and year first hereinabove set forth.
MICRON ELECTRONICS, INC.
By: /s/ Joel J. Kocher
-------------------------------------------
Name: Joel J. Kocher
Title: President and Chief Executive Officer
INTERLAND, INC.
By: /s/ Ken Gavranovic
-------------------------------------------
Name: Ken Gavranovic
Title: President and Chief Executive Officer
MICRON TECHNOLOGY, INC.
By: /s/ Steven R. Appleton
-------------------------------------------
Name: Steve Appleton
Title: Chairman, CEO and President
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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THE INTERLAND FOUNDERS
KEN GAVRANOVIC
By: /s/ Ken Gavranovic
-------------------------------------------
WALDEMAR FERNANDEZ
By: /s/ Waldemar Fernandez
-------------------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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THE OTHER HOLDERS
BANCBOSTON VENTURES INC.
By: /s/ M. Scott McCormack
-------------------------------------------
Name: M. Scott McCormack
Title: Vice President
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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BELL ATLANTIC INVESTMENTS, INC.
By:
-------------------------------------------
Name:
Title:
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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<PAGE>
BOULDER VENTURES, III L.P.
By: /s/ Andrew E. Jones
-------------------------------------------
Name: Andrew E. Jones
Title: General Partner
BOULDER VENTURES III (ANNEX) L.P.
By: /s/ Andrew E. Jones
-------------------------------------------
Name: Andrew E. Jones
Title: General Partner
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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CPQ HOLDINGS INC.
By:
-------------------------------------------
Name:
Title:
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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<PAGE>
CREST COMMUNICATIONS
PARTNERS L.P.
By: CREST Communications Holdings, LLC,
its authorized representative
By: /s/ Gregg A. Mockenhaupt
-------------------------------------------
Name: Gregg A. Mockenhaupt
Title: Managing Director
CREST ENTREPRENEURS FUND L.P.
By: CREST Communications Holdings, LLC,
its authorized representative
By: /s/ Gregg A. Mockenhaupt
-------------------------------------------
Name: Gregg A. Mockenhaupt
Title: Managing Director
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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HEWLETT-PACKARD CORPORATION
By:
-------------------------------------------
Name:
Title:
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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<PAGE>
MICROSOFT CORPORATION
By: John A. Seethoff
-------------------------------------------
Name: John A. Seethoff
Title: Assistant Secretary
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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<PAGE>
NETWORK SOLUTIONS, INC.
By: James M. Ulam
-------------------------------------------
Name: James M. Ulam
Title: SVP, General Counsel
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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<PAGE>
PRIVATE EQUITY CO-INVEST LTD.
By:
-------------------------------------------
Name:
Title:
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
THE OTHER HOLDERS
Bell Atlantic Investments, Inc.
CPQ Holdings, Inc.
Crest Communications Partners L.P.
Crest Entrepreneurs Fund L.P.
Boulder Ventures III, L.P.
Boulder Ventures III (Annex), L.P.
BancBoston Ventures, Inc.
Hewlett-Packard Company
Microsoft Corporation
Network Solutions, Inc.
Private Equity Co-Invest Ltd.
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