Exhibit 10.18
WARRANT SHARES AND SERIES C PREFERRED SHARES
REGISTRATION AGREEMENT
This Registration Agreement ("Agreement") is entered into as of April 30,
1999 by and among The Cobalt Group, Inc., a Washington corporation ("Cobalt"),
and Locators, Inc., an Oregon corporation, Parts Finder Locating Systems, Inc.,
an Oregon corporation, and Compu-Time, Inc., an Oregon corporation
(collectively, the "Holders").
RECITALS
A. Cobalt has issued to the Holders warrants ("Warrants") to purchase
shares of Cobalt common stock, $0.01 par value ("Common Stock") and shares of
Cobalt Series C Preferred Stock, $0.01 par value ("Series C Preferred") pursuant
to the terms of a Purchase Agreement to which Cobalt and Holders are parties,
dated as of April 30, 1999 (the "Purchase Agreement").
B. Cobalt has agreed to take steps to permit the Holders to resell the
Common Stock to be received by the Holders on conversion of Series C Preferred
and on exercise or conversion of Warrants without restriction under the
Securities Act of 1933, as amended (the "Securities Act").
AGREEMENT
1. SPECIAL DEFINITIONS.
(a) "Register," "registration," and "registered" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement by the U.S. Securities and Exchange Commission (the
"SEC").
(b) "Registrable Shares" means the shares of Common Stock issued or
issuable upon conversion of the Series C Preferred and upon exercise or
conversion of the Warrants.
(c) "Registrable Securities" means (i) any Series A Preferred Stock issued
pursuant to the Purchase Agreement between Cobalt, The Productivity Fund III,
L.P., Environmental Private Equity Fund II, L.P., and Mark Koulogeorge dated
February 28, 1997 (the "Series A Purchase Agreement"); (ii) any Series B
Preferred Stock issued pursuant to the Purchase Agreement between Cobalt and
Warburg, Pincus Equity Partners, L.P. dated October 7, 1998 (the "Series B
Purchase Agreement") and any Series B Preferred Stock issued to the Reynolds and
Reynolds Company, (iii) any Common Stock issued upon the conversion of any
Series A Preferred Stock issued pursuant to the Series A Purchase Agreement;
(iv) any Common Stock issued upon the conversion of any Series B Preferred Stock
issued pursuant to the Series B Purchase Agreement and any Common Stock issued
upon the conversion of any Series B
Preferred Stock issued to the Reynolds and Reynolds Company, and (v) any Common
Stock issued or issuable with respect to the securities referred to in clauses
(i), (ii), (iii) and (iv) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization.
2. RESALE REGISTRATION.
After its initial public offering, Cobalt shall use its best efforts to
qualify for registration on Form S-3 or any comparable or successor form or
forms (a "Short Form Registration Statement"). If a Short Form Registration
Statement is available for use by Cobalt, the holders of a majority of the
Registrable Shares that have not previously been registered for resale pursuant
to this Section 2 may make a written request (a "Resale Registration Request")
that Cobalt register under the Securities Act the Registrable Shares that are
the subject of the Resale Registration Request on such form (a "Resale Demand
Registration"). Promptly after receipt of such Resale Registration Request,
which shall specify the number of Registrable Shares to be registered and the
intended method of disposition thereof, Cobalt shall as expeditiously as
possible prepare and file a Short Form Registration Statement with respect to
such Registrable Shares. Cobalt agrees to use its best efforts to cause such
Resale Demand Registration to become effective as expeditiously as reasonably
possible and thereafter to keep it continuously effective for a period of
180 days from the date on which the SEC declares the Resale Demand Registration
effective or such shorter period as will terminate when all the Registrable
Shares covered by the Resale Demand Registration have been sold.
3. PIGGYBACK REGISTRATIONS.
(a) Whenever the Company proposes to register any of its securities under
the Securities Act (other than pursuant to a registration on Form S-8 or S-4)
and the registration form to be used may be used for the registration of
Registrable Shares (a "Piggyback Registration"), the Company will give prompt
written notice to all holders of Registrable Shares of its intention to effect
such a registration, which notice shall specify whether such offer will be
underwritten and shall include all jurisdictions in which the Company intends to
attempt to qualify such securities under applicable blue sky or state securities
laws, and will include in such registration all Registrable Shares with respect
to which the Company has received written requests for inclusion therein within
ten days after the receipt of the Company's notice.
(b) The Registration Expenses of the holders of Registrable Shares will be
paid by the Company in all Piggyback Registrations.
(c) If a Piggyback Registration is an underwritten primary registration on
behalf of the Company, 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
without adversely affecting the marketability of the offering, including the
proposed price for the securities, the Company will include in such
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registration (i) first, the securities the Company proposes to sell,
(ii) second, the Registrable Shares and Registrable Securities requested to
be included in such registration, pro rata among the holders of such
Registrable Shares and Registrable Securities on the basis of the number of
shares owned by each such holder, and (iii) third, other securities requested
to be included in such registration.
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities, 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 without adversely affecting the
marketability of the offering, including the proposed price for the
securities, the Company will include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, the Registrable Shares and Registrable Securities
requested to be included in such registration, pro rata among the holders of
such Registrable Shares and Registrable Securities on the basis of the number
of shares owned by each such holder, and (iii) third, other securities
requested to be included in such registration.
(e) If the Company has previously filed a registration statement with
respect to Registrable Shares pursuant to paragraph 2 or pursuant to this
paragraph 3, and if such previous registration has not been withdrawn or
abandoned, the Company will not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-8 or S-4 or any successor form), whether on its own behalf
or at the request of any holder or holders of such securities, until a period of
at least ninety days has elapsed from the effective date of such previous
registration.
4. OBLIGATIONS OF COBALT.
When required by this Agreement to register Registrable Shares, Cobalt
shall, as promptly as reasonably possible:
(a) Prepare and file with the SEC a registration statement covering such
Registrable Shares and use its best efforts to cause such registration statement
to become effective, and, keep such registration statement continuously
effective for up to 180 days or such shorter period as will terminate when all
the Registrable Shares covered by the registration statement have been sold.
(b) Prepare and file with the SEC any amendments and supplements to the
registration statement and the prospectus used in connection with it needed to
comply with the Securities Act with respect to the sale of all Registrable
Shares covered by such registration statement.
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(c) Give the Holders the number of copies of preliminary and final
prospectuses, in conformity with the requirements of the Securities Act, and
other documents that they reasonably request to facilitate the sale of their
Registrable Shares.
(d) Use its best efforts to register and qualify the Registrable Shares
covered by such registration statement under securities or Blue Sky laws of such
jurisdictions that the Holders request, PROVIDED that Cobalt shall not be
required in connection therewith to qualify to do business or to file a general
consent to service of process in any such jurisdictions.
(e) Notify each holder of Registrable Shares covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, 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.
5. HOLDERS' INFORMATION.
Cobalt is obligated to take actions to register Registrable Shares under
this Agreement only if the Holders requesting registration give Cobalt on a
timely basis all information regarding themselves, their Registrable Shares, and
their intended method of disposition of such securities as shall be reasonably
required to effect the registration of their Registrable Shares.
6. EXPENSES OF REGISTRATION.
Cobalt shall pay all expenses other than underwriting discounts,
commissions and fees and disbursements of legal counsel for the selling Holders
relating to Registrable Shares incurred in connection with registrations,
filings or qualifications pursuant to this Agreement, including (without
limitation) all registration, filing and qualification fees, printing and
accounting fees, and fees and disbursements of counsel for Cobalt.
7. INDEMNIFICATION.
If any Registrable Shares are included in a registration statement under
this Agreement:
(a) To the extent permitted by law, Cobalt will indemnify and hold
harmless each Holder and each person, if any, who controls such Holder within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any losses, claims, damages or liabilities
to which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based on any of
the following statements, omissions, or violations (each a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary or final prospectus
contained therein or any amendments or supplements thereto,
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(ii) any omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by Cobalt of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law; PROVIDED, HOWEVER, that this indemnity shall not inure to the
benefit of any Holder, or controlling person with respect to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Cobalt, nor with respect to any
loss, claim, damage, liability or action that arises out of or is based on a
Violation that occurs in reliance on written information given to Cobalt
expressly for use in connection with such registration by any such Holder, or
controlling person.
(b) To the extent permitted by law, each Holder whose Registrable Shares
are included in a registration pursuant hereto will indemnify and hold harmless
Cobalt, each of its directors, each of its officers who have signed the
registration statement, each person, if any, who controls Cobalt within the
meaning of the Securities Act (a "Cobalt Indemnitee"), against any losses,
claims, damages or liabilities to which such Cobalt Indemnitee may become
subject, under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based on any Violation that occurs in
reliance on written information given by such Holder or its agents expressly for
use in connection with such registration; PROVIDED, HOWEVER, that (i) this
indemnity shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder and (ii) the obligations of such Holder shall be limited to an
amount equal to the gross proceeds to such Holder.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action (including any governmental action),
the indemnified party will give the indemnifying party written notice thereof.
The indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly notified, to assume the defense thereof. An indemnified party
shall have the right to retain its own counsel, reasonably satisfactory to the
indemnifying party, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party would be inappropriate due to
actual or potential conflicting interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to give
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 6, but the failure to give such notice
shall not relieve it of any liability that it may otherwise have to any
indemnified party.
(d) If the indemnification provided for in this Section 6 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable
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by such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the parties under this Section 6 shall survive the
completion of any offering of Registrable Shares.
8. RULE 144.
With a view to making available the benefits of certain rules and
regulations of the SEC that may permit the sale of the Registrable Shares to the
public without registration or pursuant to a Short Form Registration Statement,
after its initial public offering, Cobalt agrees to use its best efforts to:
(a) Make and keep public information regarding Cobalt available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times from and after the effective date that Cobalt becomes subject to the
reporting requirements of the Securities Act or the Exchange Act; and
(b) File with the SEC in a timely manner all reports and other documents
required of Cobalt under the Securities Act and the Exchange Act at any time
after it has become subject to such reporting requirements.
9. LOCK-UP AGREEMENT.
If requested by Cobalt and an underwriter managing an underwritten offering
of Cobalt's securities, each Holder that is an officer, director, consultant or
is otherwise an affiliate of Cobalt or any subsidiary entity agrees that it
shall not sell or otherwise transfer or dispose of any Registrable Shares held
by such Holder without the prior written consent of Cobalt or such underwriter
for a period of time not to exceed one hundred eighty (180) days following the
effective date of a registration statement of Cobalt filed under the Securities
Act (the "Lock-up Period"), provided, however, that all other officers,
directors and similarly situated affiliates also agree to such a restriction.
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10. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Oregon.
11. SUCCESSORS AND ASSIGNS.
Except as otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors, permitted assigns,
heirs, executors and administrators of the parties hereto.
12. ENTIRE AGREEMENT; AMENDMENT AND WAIVER.
This Agreement constitutes the full and entire understanding and agreement
between the parties with regard to the subject matter hereof. This Agreement may
not be amended, waived, discharged or terminated, except by a written instrument
signed by Cobalt and the holders of at least a majority of the Registrable
Shares.
13. NOTICES.
All notices and other communications required or permitted hereunder shall
be in writing and shall be delivered personally or by registered mail or
overnight courier service to the party concerned addressed as follows:
If to Cobalt to: With a copy to:
The Cobalt Group, Inc. Stoel Rives LLP
2030 First Avenue 3600 One Union Square
Seattle, WA 98121 600 University Street
Attention: Geoffrey T. Barker, Seattle, WA 98101
Co-Chief Executive Officer Attention: Ronald J. Lone
Facsimile No.: (206) 269-6350 Facsimile No.: (206) 386-7500
If to the Holders to: With a copy to:
Parts Finder Locating Systems, Inc. Bruce G. Berning
14718 S.W. Scarlett Drive Tonkon Torp LLP
Tigard, OR 97224 888 SW Fifth Avenue, Suite 1600
Facsimile No.: (503) 590-6193 Portland, OR 97204
Facsimile No.: (503) 972-3712
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With a copy to:
Locators, Inc. Allen B. Bush
8305 S.E. Monterey, Suite 104 13825 SW 33rd Place
Portland, OR 97266 Beaverton, OR 97008
Facsimile No.: (503) 653-9536 Facsimile No.: (503) 646-1391
With a copy to:
Compu-Time, Inc. Thomas G. Guilbert
8305 S.E. Monterey, Suite 110 2370 S.W. Montgomery Drive
Portland, OR 97266 Portland, OR 97201
Facsimile No.: (503) 659-3753 Facsimile No.: (503) 228-0811
or to any other address as may from time to time be notified in writing by any
party to the other parties hereto. Any notice or other communication shall be
deemed to have been given on the day delivered, if delivered by hand; one
business day following the day deposited with an overnight courier service; or
within four business days of mailing.
14. DELAYS OR OMISSIONS.
No delay or omission to exercise any right, power or remedy accruing to any
Holder upon any breach or default of Cobalt under this Agreement shall impair
any such right, power or remedy of such Holder, nor shall it be construed to be
a waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
therefore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of any breach or default under
this Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.
15. RIGHTS; SEPARABILITY.
Unless otherwise expressly provided herein, a Holder's rights hereunder are
several rights, not rights jointly held with any of the other Holders. In case
any provision of the Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
16. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
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THE HOLDERS: COBALT:
Locators, Inc. The Cobalt Group, Inc.
By By
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Its Its
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Compu-Time, Inc.
By
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Its
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Parts Finder Locating Systems, Inc.
By
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Its
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