EXHIBIT 10.12
XXXXXXXXX'X REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of May 30, 1997, by and among Peapod, Inc., a
Delaware corporation (the "Company"), Peapod LP, an Illinois limited partnership
("Peapod LP"), Peapod, Inc., a Delaware corporation ("Peapod, Inc."), and Xxxxxx
X. Xxxxxxxxx and Xxxxxx X. Xxxxxxxxx (collectively with their permitted
successors and assigns, the "Stockholders").
Pursuant to that certain Conversion Agreement and Plan of Reorganization
dated May 30, 1997 (the "Plan"), the Stockholders, together with certain other
persons, shall exchange their limited partnership interests of Peapod LP for
shares of voting common stock ("Common Stock" or "Shares"), par value $.01 per
share, of the Company, prior to the closing of the initial public offering (the
"IPO") of Common Stock of the Company (such date being the "IPO Closing Date").
The parties hereto acknowledge that following the transactions occurring on
the IPO Closing Date (i) Peapod, Inc. shall dissolve and its corporate existence
shall cease to exist and (ii) New Peapod, Inc. shall change its name to "Peapod,
Inc."
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:
1. Effective Date.
This Agreement is conditioned upon the closing of the initial public
offering of Common Stock of the Company prior to December 31, 1997, and shall
take effect immediately following the completion of the IPO.
2. Definitions.
"Common Stock" has the meaning set forth in the first recital of this
Agreement.
"Company" has the meaning set forth in this first paragraph of this
Agreement.
"Demand Registration" has the meaning set forth in Section 3(a)(i) of
this Agreement.
"Exchange Act" has the meaning set-forth in Section 3(a)(iv) of this
Agreement.
"Holder" means, collectively, the Ventureholders and the Investors.
"Investors" means the stockholders named in the Investors Agreement,
and their successors.
"Investors Agreement" means that certain Amended and Restated
Investors Agreement dated as of April 1, 1997 by and among the Company, Peapod
LP., Peapod Inc. and the stockholders named herein.
"IPO Closing Date" has the meaning set forth in the first recital of
this Agreement.
"Peapod, Inc." has the meaning set forth in the first paragraph of
this Agreement.
"Peapod LP" has the meaning set forth in the first paragraph of this
Agreement.
"Piggyback Registration" has the meaning set forth in Section 3(b)(i)
of this Agreement.
"Option Shares" means Shares subject to rights to acquire such Shares.
"Securities Act" has the meaning set forth in Section 3(a)(i) of this
Agreement.
"Severance Agreement" means the Severance Agreement, dated May __,
1997, between the Company and Xxxxxx X. Xxxxxxxxx or Xxxxxx X. Xxxxxxxxx, as the
case may be.
"Shares" has the meaning set forth in the first recital of this
Agreement.
"Stockholders" has the meaning set forth in the first paragraph of
this Agreement.
"Unitholders Agreement" means that certain Unitholders Agreement dated
as of April 19, 1996, as amended, by and among Peapod LP, Peapod, Inc. and each
of the unitholders named therein.
"Ventureholders" means the unitholders named in the Unitholders
Agreement, and their successors.
3. Registration Rights.
(a) Demand Registrations.
(i) Demand Registrations by Stockholders. Each Stockholder,
with respect to himself, shall have the demand registration rights set
forth in this Section 3(a) beginning immediately after the first to occur
of (A) the third anniversary of the IPO Closing Date and (b) the Company's
termination of such Stockholder's employment for any reason other than for
"Cause" as such term is defined in such Stockholder's Severance Employment
Agreement. The Stockholders may request an aggregate of two registrations
under the Securities Act of 1933, as amended from time to time ("Securities
Act") of all or a part of their Shares ("Demand Registration"); provided,
that the aggregate offering price of such Shares requested to be registered
in any such Demand Registration must equal at least $5 million. Any such
request for a Demand Registration under this Section 3(a)(i) shall specify
the approximate number of Shares requested to be registered and the
anticipated per Share price range for such offering.
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(ii) Upon Effectiveness. A registration will not count as one
of the permitted Demand Registrations until it has become effective (unless
such registration has not become effective due solely to the fault of the
Stockholder(s) requesting such registration).
(iii) Notice of and Priority on Demand Registrations. A
Stockholder that requests a Demand Registration shall notify the other
Stockholder of such request within ten days thereafter to permit
participation of such other Stockholder in such registration, which notice
shall set forth the terms of such request. [In the event a Stockholder
requests a Demand Registration pursuant to its rights hereunder, the
Company will notify the Holders of such request in order to permit
participation of the Holders in such registration.] If a Demand
Registration is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Shares
requested to be included in such offering exceeds the number of Shares
which can be sold therein without adversely affecting the marketability of
the offering, the Company will include in such registration the Shares
requested to be included in such registration, pro rata among the
Stockholders and other Holders so requesting on the basis of the number of
Shares owned by, and the number of Shares subject to rights to acquire
Shares held by, each such holder.
(iv) Restrictions on Demand Registrations. The Company will
not be obligated to effect any Demand Registration within 180 days after
the effective date of a previous Demand Registration or a registration in
which the Stockholders were given piggyback rights pursuant to Section
3(b). The Company may postpone for up to 120 days the filing or the
effectiveness of a registration statement for a Demand Registration if (1)
the Company has engaged or will engage in a firm commitment underwritten
public offering within 90 days of the request for registration, or (2) the
Company reasonably determines that the requested registration would
interfere with a "material transaction", defined as a transaction that
would require a filing on a Current Report on Form 8-K with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"); provided that in such
event, the Stockholder(s) initially requesting such Demand Registration
will be entitled to withdraw such request and, if such request is
withdrawn, such Demand Registration will not count as one of the permitted
Demand Registrations hereunder.
(v) Selection of Underwriters. The Company will have the
right to select the investment banker(s) and manager(s) of national
standing to administer the offering, subject to the approval of the
Stockholders included in any Demand Registration, which approval will not
be unreasonably withheld.
(b) Piggyback Registrations.
(i) Right to Piggyback. At any time after the completion of
the IPO (but not as part of the IPO, including any overallotment option
granted in connection with the IPO), whenever the Company proposes to
register its securities for an aggregate offering price of at least $5
million under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Shares (other than forms for registrations relating solely
to employee benefit plans or transactions effected
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pursuant to Rule 145 under the Securities Act) (a "Piggyback
Registration"), the Company will give prompt written notice to the
Stockholders of its intention to effect such a registration and will
include in such registration all Shares with respect to which the Company
has received written requests from Stockholders for inclusion therein
within 30 days after the receipt of the Company's notice.
(ii) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and
the managing underwriters advise the Company in writing that in their
opinion the number of Shares 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, the Company will include in
such registration: first, the Shares the Company proposes to sell; and
second, after all Shares the Company proposes to sell are included, the
Shares requested to be included in such registration, pro rata among the
requesting holders of Shares or of rights to acquire Shares on the basis of
the number of Shares owned or subject to such rights.
(iii) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten registration other than on behalf of the
Company, and the managing underwriters advise the Company in writing that
in their opinion the number of Shares 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, the Company will
include in such registration the Shares requested to be included in such
registration, pro rata among the requesting holders of Shares or of rights
to acquire Shares on the basis of the number of Shares owned or subject to
such rights.
(c) Holdback Agreements. Each Stockholder agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144) of Shares of
the Company, or any securities convertible into or exchangeable or exercisable
for such Shares, during the seven days prior to and the 120-day period beginning
on the effective date of any underwritten public offering of Shares (except as
part of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(d) Registration Procedures. Whenever the Stockholders have
requested that any Shares be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration and the sale of such Shares
in accordance with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:
(i) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Shares and use its
best efforts to cause such registration statement to become effective,
provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to the counsel
selected by the holders of a majority of the Shares covered by such
registration statement copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel;
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(ii) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective for a period of not less than three
months and comply with the provisions of the Securities Act with respect to
the disposition of all Shares covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(iii) furnish to each selling Stockholder 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 Stockholder may
reasonably request in order to facilitate the disposition of the Shares
owned by such Stockholder;
(iv) use its best efforts to register or qualify such Shares
under such other securities or blue sky laws of such jurisdictions as any
selling Stockholder reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
Stockholder to consummate the disposition in such jurisdictions of the
Shares owned by such Stockholder, provided that the Company will not be
required to (x) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this paragraph, (y)
subject itself to taxation in any such jurisdiction, or (z) consent to
general service of process in any such jurisdiction;
(v) notify each selling Stockholder, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such
Stockholder, the Company will prepare 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 any fact necessary to make the statements therein not
misleading;
(vi) cause all such Shares to be listed on each securities
exchange on which similar securities issued by the Company are then listed
or, if not so listed, to be listed on The Nasdaq Stock Market;
(vii) provide a transfer agent and registrar for all such Shares
not later than the effective date of such registration statement;
(viii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions
as the holders of a majority of the Shares being sold or the underwriters,
if any, reasonably request in order to expedite or facilitate the
disposition of such Shares;
(ix) make available for inspection by any selling Stockholder,
any underwriter participating in any disposition pursuant to such
registration statement and any attorney,
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accountant, or other agent retained by any such Stockholder or underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors,
employees, and independent accountants to supply all information reasonably
requested by any such Stockholder, underwriter, attorney, accountant, or
agent in connection with such registration statement;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder; and
(xi) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending
or preventing the use of any related prospectus or suspending the
qualification of any Shares included in such registration statement for
sale in any jurisdiction, the Company will use its reasonable best efforts
promptly to obtain the withdrawal of such order.
(e) Registration Expenses.
(i) The Company shall pay all expenses incurred by itself and the
Stockholders incident to the Piggyback Registration provisions of this
Agreement, including without limitation, the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any of its liability insurance, the
expenses and fees for listing the securities to be registered on the applicable
securities exchange or on The Nasdaq Stock Market, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding underwriting discounts and selling commissions), and other persons
retained by the Company and the reasonable cost (not to exceed $20,000) of one
special legal counsel to represent such holders proposing to distribute their
securities through such registration (the "Registration Expenses"); provided
that each Stockholder shall pay its allocable share of all underwriting
discounts and selling commissions in connection with all such Piggyback
Registrations.
(ii) All registration expenses and underwriting discounts and selling
commissions incident to any Demand Registration shall be borne by the Company
and the Stockholders (and any other holders included in such registration) in
proportion to the number of securities to be registered by each.
(f) Indemnification Pursuant to a Registration.
(i) The Company agrees to indemnify, to the extent permitted by
law, each Stockholder, its officers and directors and each person who
controls such Stockholder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities, and expenses
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(including investigation and legal fees and expenses incurred in connection
with any claim asserted) to which they or any of them may be subject caused
by any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus, or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by
or contained in any information furnished in writing to the Company by such
Stockholder expressly for use therein or by such Stockholder's failure to
deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has furnished such
Stockholder with copies of the same. In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers, and
directors and each person who controls such underwriters (within the
meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Stockholders.
(ii) In connection with any registration statement in which a
Stockholder is participating, each such Stockholder will furnish to the
Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, will indemnify
the Company, its directors and officers, and each person who controls the
Company (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities, and expenses resulting from any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus, or preliminary prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading based solely upon information so furnished to the
Company in writing expressly for use therein; provided, however, that the
maximum liability of such indemnifying Stockholder hereunder shall be
limited to the proceeds actually received by such Stockholder from the sale
of such Shares.
(iii) Any person entitled to indemnification hereunder will (x)
give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (y) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense
is assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(iv) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
person of such indemnified party and will survive the transfer of Shares.
The Company also agrees to make such provisions, as are reasonably
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requested by any indemnified party, for contribution to such party in the
event the Company's indemnification is unavailable for any reason.
(g) Participation in Underwritten Registrations. No person may
participate in any registration hereunder which is underwritten unless such
person (i) agrees to sell such person's Shares on the basis provided in any
underwriting arrangements approved by the person or persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, and other documents
required under the terms of such underwriting arrangements.
(h) Transfer of Registration Rights. The rights to cause the Company
to register Shares granted to a Stockholder under this Section 3 may be assigned
to a transferee (or a subsequent transferee) of all the Stockholder's Shares
pursuant to the terms hereof provided that notice of such assignment is given to
the Company.
4. Current Public Information. The Company hereby covenants and agrees
that the Company shall file all reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Securities and Exchange Commission thereunder and shall take such further action
as any Stockholder may reasonably request, all to the extent required to enable
such Stockholder to sell Shares pursuant to Rule 144 adopted by the Securities
and Exchange Commission under the Securities Act (as such rule may be amended
from time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission.
5. Miscellaneous.
(a) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
(b) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the parties hereto
and supersedes any prior understandings, agreements, or representations by or
between the parties hereto, written or oral, to the extent they related in any
way to the subject matter hereof.
(c) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. Except as otherwise provided herein, no party
hereto may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other parties
hereto.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
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(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given upon receipt
if it is sent by facsimile, or reputable express courier, and addressed or
otherwise sent to the intended recipient as set forth below:
If to the Company:
Peapod, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Copies to:
Cowen, Crowley, Nord & Staub
00 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to the Stockholders, to the addresses and facsimile numbers on file with
the Company.
Any party hereto may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address or facsimile
number set forth above or on file with the Company using any other means
(including personal delivery, messenger service, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication shall
be deemed to have been duly given unless and until it actually is received by
the intended recipient. Any party hereto may change the address or facsimile
number to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other parties hereto notice in the
manner herein set forth.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Illinois without giving
effect to any choice or conflict of law provision or rule (either of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
(h) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid against the Company or the Stockholders unless the same
shall be in writing and signed by the Company and the holders of at least two-
thirds of the Shares, respectively. No waiver by any parties hereto of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default,
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misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
(i) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
* * *
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SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as of the date first above written.
Peapod, Inc.
By:______________________________________
Printed Name:______________________
Title:_____________________________
Peapod, Inc.
By:______________________________________
Printed Name:______________________
Title:_____________________________
Peapod LP
By: Peapod, Inc.
its General Partner
By:________________________________
Printed Name:______________________
Title:_____________________________
_________________________________________
Xxxxxx X. Xxxxxxxxx
_________________________________________
Xxxxxx X. Xxxxxxxxx
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