Exhibit 99.4
XXXX.XXX INVESTOR RIGHTS AGREEMENT
XXXX.XXX INVESTOR RIGHTS AGREEMENT, dated as of the 14th day of July,
1999, by and among 3CUBE, Inc., a Delaware corporation, doing business at 000
Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000 (formerly known as X.X.X.
Xxxx International, Inc., doing business as Technology Workshop, and hereinafter
referred to as the "Purchaser"), and and Xxxx.xxx, Inc., a Delaware corporation,
doing business at 00 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 (the "Company").
The Company and the Purchaser are collectively referred to as the "Parties."
W I T N E S S E T H:
WHEREAS, the Company and the Purchaser are parties to a certain Stock
Purchase Agreement dated as of the date hereof (the "Stock Purchase Agreement");
and
WHEREAS, in order to induce the Parties to enter into the Stock Purchase
Agreement, the Purchaser and the Company agree that this Agreement shall govern
the rights of the Parties with respect to the subject matter set forth;
NOW, THEREFORE, in consideration of the promises and mutual agreements
hereinafter contained, the Parties do hereby agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1. Definitions. The following terms, as used herein, shall have
the following meanings:
"Act" means the Securities Act of 1933.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such Person.
"Agreement" means this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"Company Stock" means any shares of any class of authorized capital stock
in the Company.
"Competitor" means any Person whose primary business is providing Internet
services similar to those provided by the Company.
"Incidental Registration" has the meaning set forth in Section 2.1.1. of
this Agreement.
"Indemnified Party" and "Indemnifying Party" has the meaning set forth in
Section 2.6.3. of this Agreement.
"Party" has the meaning set forth in the preface to this Agreement.
"Person" means an individual, a partnership, a limited liability company,
a corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Purchaser" has the meaning set forth in the preface to this Agreement.
"Registrable Securities" means (i) the Class A Common Stock of the Company
issued to the Purchaser pursuant to the Stock Purchase Agreement; (ii) any Class
A Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of
the securities referenced in clause (i) above or this clause (ii); and (iii) any
other shares of capital stock of the Company into or for which the securities
referenced in clause (i) and (ii) may be converted into or exchanged pursuant to
a recapitalization or reclassification of the Company's capital stock.
"SEC" means the Securities and Exchange Commission.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (i) liens for taxes not yet due and
payable or for taxes that the taxpayer is contesting in good faith through
appropriate proceedings, (ii) purchase money liens securing rental payments
under capital lease arrangements, and (iii) liens, charges, encumbrances,
easements, rights-of-way, building and use restrictions, exceptions,
reservations and limitations that do not in any material respect adversely
detract from the value of the property subject thereto or materially impair the
operation of the Company.
"Stock Purchase Agreement" has the meaning set forth in the recitals to
this Agreement.
Section 1.2. Other Terms. Other terms may be defined elsewhere in the text
of this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
Section 1.3. Other Definitional Provisions. The words "herein," "hereof,"
"hereto" and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa, and in such gender,
as the sense and circumstances require.
ARTICLE II
REGISTRATION RIGHTS OF THE PURCHASER
The Company and the Purchaser covenant and agree as follows:
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Section 2.1. Registration 2.1.1. Incidental Registration. If at any time
the Company proposes to register any Company Stock under the Act for its
own account or for the account of any of its stockholders, in connection
with an underwritten public offering of such Company Stock, on a form that
would also permit registration of the Registrable Securities, the Company
shall, each such time, give the Purchaser not less than 20 days written
notice of such proposed registration (the "Purchaser Incidental
Registration"). Upon the written request of the Purchaser, given within 20
days after receipt of any such notice from the Company, the Company shall,
subject to Section 2.1.2., cause to be included in such registration all
of the Registrable Securities the Purchaser requests be registered in such
registration. There shall be no restriction with respect to the number of
times the Purchaser may request such Purchaser Incidental Registration.
2.1.2. Pro Rata Incidental Registration of Company Stock. If
the managing underwriter of any offering described in the first sentence
of Section 2.1.1. determines that the number of shares proposed to be sold
by the Company or by other stockholders of Company Stock is greater than
the number of shares that the underwriter believes feasible to sell at the
time, at the price and upon the terms approved by the Company, then the
number of shares of Company Stock that the underwriter believes may be
sold shall be allocated for inclusion in the registration statement in the
following order of priority: (A) Company Stock sold for the account of any
holders of the Company's securities if the registration was initiated by
such holders pursuant to contractual demand registration rights and
Company Stock sold for the account of Lycos, Inc. ("Lycos"), pursuant to
contractual incidental registration rights that permit it to participate
in such an offering on a pro rata basis with such holders, pro rata among
such holders and Lycos according to the number of shares requested to be
registered by such holders and Lycos; (B) Company Stock sold for the
account of the Company; and (C) pro rata among any other holders of
securities of the Company exercising contractual incidental registration
rights (other than holders described in clause (A) above if pursuant to a
demand right and other than Lycos as described in clause (A) above) and
the Purchaser according to the number of shares requested to be registered
by such other holders and the Purchaser; provided, however, that (1) as
between the Company, on the one hand, and the Purchaser and other holders
referred to in clause (C) above, on the other hand, at least 10% of the
Purchaser's Registrable Securities and of such other holders' registrable
securities requested to be included shall be included in such
underwriting; and (2) the right of such other holders and the Purchaser to
participate in the offering shall have priority over Class A Common Stock
held by employees of the Company and Class B Common Stock held by
employees of the Company. If the Purchaser disapproves of the terms of the
underwriting (including the number of Registrable Securities to be
included), it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter; provided, however, the election to
withdraw occurs within 10 days after the Purchaser receives notice of the
terms of the underwriting.
2.1.3. Termination of Registration Rights. After such time
when the Purchaser becomes eligible to sell all of its Class A Common
Shares under Rule 144 of
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the Act within any 3 month period without volume limitations or under Rule
144(k) thereof, the Purchaser shall not be entitled to exercise any right
provided for in this Section 2.1 with respect to those shares eligible to
be sold.
Section 2.2. Obligations of the Company. Where required under
Section 2.1. to use its best efforts to effect the registration of any of the
Registrable Securities, the Company shall, as expeditiously as reasonably
possible,
2.2.1. Prepare and file with the SEC a registration statement
with respect to such Shares and use its best efforts to cause such
registration statement to become effective and, upon the request of the
holders of Company Stock who initiated the request for such registration
pursuant to contractual demand registration rights holding the minimum
percentage of Company Stock necessary to obtain such registration under
such rights, keep such registration statement effective for up to 120
days;
2.2.2. Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration;
2.2.3. Furnish to the Purchaser such numbers of copies of such
registration statement and prospectus, including any preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as the Purchaser may reasonably request in order to facilitate
the disposition of any of its Registrable Securities;
2.2.4. Use its best efforts to register and qualify the
securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the securities covered by the
registration statement; and
2.2.5. Otherwise comply with all applicable rules and
regulations of the SEC.
Section 2.3. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2 that the
Purchaser shall furnish to the Company such information regarding the Purchaser,
the Registrable Securities held by the Purchaser, and the intended method of
disposition thereof as the Company or its appointed agents shall reasonably
request and as shall be required in connection with the action to be taken by
the Company.
Section 2.4. Registration Expenses. In the case of any registration
effected pursuant to Section 2, the Company shall bear all registration and
qualification fees and expenses, and all costs and disbursements of counsel for
the Company; provided, however, that the Purchaser shall bear the fees and costs
of the Purchaser's own counsel and all underwriting discounts and commissions
with respect to the Registrable Securities sold by it.
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Section 2.5. Selection of Underwriters. If a registration pursuant to
Section 2.1.1. of this Agreement involves an underwritten offering, the
Company shall have the right to select the investment bankers and managers
to administer the offering. The Company shall not be required under
Section 2.1.1. to register any of the Registrable Securities in such
registration unless the Purchaser accepts the terms of the underwriting as
agreed upon between the Company and the underwriter.
Section 2.6. Indemnification. If any Registrable Securities are included
in a registration statement pursuant to this Section 2, then,
2.6.1. To the extent permitted by law, the Company shall
indemnify and hold harmless the Purchaser, agents for the Purchaser, any
underwriter for the Purchaser, and each Person, if any, who controls such
Person within the meaning of the Act, against any losses, claims, damages
or liabilities, joint or several, to which they may become subject under
the Act or otherwise, insofar as such losses, claims, damages, or
liabilities arise out of any untrue statement or alleged untrue statement
of material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained in the registration
statement, or any amendments or supplements to the registration statement,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, and will reimburse the
Purchaser, the agents for the Purchaser, such underwriter, or controlling
Person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission
based upon and in conformity with written information furnished to the
Company by an instrument duly executed by the Purchaser or underwriter and
stated to be specifically for use therein.
2.6.2. To the extent permitted by law, the Purchaser shall
indemnify and hold harmless the Company, each of its directors, officers,
controlling persons, agents, advisors, and any underwriter for the Company
against any losses, claims, damages or liabilities to which the Company or
any such director, officer, controlling person, agent, advisor or
underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained in the registration statement or any amendments or
supplements to the registration statement, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein
not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary prospectus,
or amendments or supplement thereto, in reliance upon and in conformity
with written information furnished by the Purchaser duly executed and
stated to be expressly for use therein, and the Purchaser will reimburse
any
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legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, agent, advisor or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, that the Purchaser's liability under this
Section 2.6.2. shall not exceed the amount of the gross proceeds of the
offering of the Purchaser's Registrable Securities included therein.
2.6.3. Each party entitled to indemnification (the
"Indemnified Party") shall give notice to the party required to provide
indemnification ("Indemnifying Party") promptly after such Indemnified
Party has knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party (at its expense) to assume the defense
of any such claim or any litigation resulting therefrom; provided,
however, that counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be reasonably satisfactory to
the Indemnified Party, and the Indemnified Party may participate in such
defense at such party's expense; provided, further, that the failure by
any Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Section 2.6., except
to the extent that the failure results in an omission of actual notice to
the Indemnifying Party and such Indemnifying Party is damaged solely as a
result of the failure to give notice; provided, further, that a refusal to
permit the Indemnifying Party to conduct such defense by such counsel
shall relieve such Indemnifying Party of its obligations under this
Section 2.6. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party,
consent to the entry of any judgment or enter into any settlement that
does not include as an unconditional term the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability with
respect to such claim or litigation.
Section 2.7. Reports Under the Securities Exchange Act of 1934. With a
view toward making available to the Purchaser the benefits of SEC Rule 144
promulgated under the Act and any other rule or regulation of the SEC that may
at any time permit the Purchaser to sell its Registrable Securities to the
public without registration, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its shares to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the Securities Exchange Act of 1934, as is
necessary to enable the Purchaser to utilize Form S-3 for the sale of its
shares, such action to be taken as soon as practicable after the end of the
fiscal year in which the first registration statement filed by the Company for
the offering of its shares to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Securities Exchange Act
of 1934 from and after the time that the Company becomes subject to such
reporting obligations; and
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(d) furnish to the Purchaser, so long as the Purchaser owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company), the Act and the Securities Exchange Act of 1934 (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (iii) such other information as may be
reasonably requested in availing the Purchaser of any rule or regulation of the
SEC which permits the selling of any such shares without registration or
pursuant to such form.
Section 2.8. Lock-Up Period. The Purchaser agrees that it shall not sell
or otherwise transfer or dispose of any Registrable Securities until December
15, 1999; provided, however, that nothing contained herein shall prohibit any
holder of Company Stock from transferring any Registrable Securities to a trust
established for estate planning purposes or from transferring Registrable
Securities to a subsidiary of Purchaser. In furtherance hereof, the Purchaser
shall execute and deliver to the Company as of the date hereof the lockup letter
submitted by Xxxxxxx Xxxxx Xxxxxx on behalf of the underwriters in connection
with the Company's initial public offering. Notwithstanding anything to the
contrary set forth herein, the terms of this Section 2.8 may not be amended or
modified, directly or indirectly, without the express written consent of the
Purchaser if such amendment or modification detrimentally affects the Purchaser.
Section 2.9. Transfer of Registration Rights. The registration rights of
the Purchaser under this Section 2 may be assigned and transferred (i) by the
Purchaser to any Affiliate of the Purchaser to whom any of the shares owned by
the Purchaser are transferred, and (ii) by the Purchaser to any transferee who
acquires at least 25,000 Registrable Securities (adjusted to reflect subsequent
stock splits, combinations, stock dividends and recapitalizations); provided,
however, that the Company is given written notice by the Purchaser at the time
of such assignment and transfer stating the name and address of the transferee
and identifying the securities with respect to which the rights under this
Section 2 are being assigned and transferred. For the purposes of this Section
2.9, a change in control of an Affiliate of the Purchaser holding shares
entitling such Affiliate to the registration rights hereunder, such that such
Affiliate is subsequent to such change of control no longer an Affiliate of the
Purchaser, shall be deemed an attempted transfer of the registration rights
hereunder and such former Affiliate of the Purchaser shall not be entitled to
such registration rights. From and after each transfer of Registrable Securities
in a manner that effects an assignment and transfer of registration rights
hereunder, all rights under this Section 2 of the Purchaser shall be exercised
by the holder of a majority in interest of the Registrable Securities.
Section 2.10. Confidentiality. Any information obtained from the Company
by the Purchaser, whether obtained in connection with the transactions
contemplated by the Stock Purchase Agreement, or otherwise, shall be maintained
confidential and not disclosed to any third party and used only for purposes of
monitoring and administering the Purchaser's investment in the Company or the
other transactions entered into in connection with the Stock Purchase Agreement;
provided, the Purchaser's obligation under this Agreement to hold all
information received from the Company shall not prohibit the Purchaser, as
applicable, from
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disclosing such information (i) if such information is public, (ii) to its board
of directors, investment advisers, attorneys, accountants, consultants and other
professionals to the extent necessary to obtain their services in connection
with the Purchaser's investment in the Company, provided that such persons shall
hold such information confidential, (iii) to any prospective purchaser of any
shares of the Company owned by the Purchaser as long as such prospective
purchaser agrees in writing to be bound by the confidentiality provisions of
this Agreement and so long as such prospective purchaser is not a Competitor of
the Company and does not hold shares of a Competitor of the Company (except that
such prospective purchaser may hold shares of a Competitor of the Company if it
is a passive investor with respect thereto (within the meaning of Rule 13d-1(c)
promulgated under the Securities Exchange Act), (iv) to any of such Purchaser's
Affiliates, provided that such Affiliates agree to hold such information
confidential as provided herein, or (v) to a regulatory body, stock exchange or
court having jurisdiction over the Purchaser or by court or administrative order
or as otherwise required by applicable law or regulation or listing or trading
agreement concerning the Purchaser, subject in each case to allowing the Company
to seek a protective order with respect to disclosure of any such information.
ARTICLE III
MISCELLANEOUS
Section 3.1. Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the Parties (including
permitted transferees of any Registrable Securities); provided that the
Purchaser's rights to sell, transfer or otherwise dispose of the Registrable
Securities is subject to the restrictions contained in Section 2.8 and the
Purchaser's rights to assign its registration rights hereunder are subject to
the restrictions contained in Section 2.9. Nothing in this Agreement is intended
to confer upon any party other than the Parties or their respective successors
and assigns any rights, remedies, obligations or liability under or by reason of
this Agreement, except as expressly provided in this Agreement.
Section 3.2. Notices. All notices hereunder shall be in writing and be
given by registered or certified mail, postage and registration fees prepaid, or
by overnight delivery, and shall be deemed given when so mailed as follows:
If to the Purchaser, to it at:
3CUBE, Inc.
000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, President
Fax: 000-000-0000
With a copy to:
Xxxxxx Xxxxxx White &McAuliffe
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0000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx, Esq.
Fax: 000-000-0000
If to the Company, to it at:
Xxxx.xxx, Inc.
00 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx, President
Fax:
With a copy to:
Xxxx.xxx, Inc.
00 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Executive Vice
President and General Counsel
Fax:
The foregoing addresses may be changed by notices given in the manner set forth
in this section.
Section 3.3. Governing Law; Forum and Consent to Jurisdiction.
This Agreement shall be construed and enforced in accordance with, and
governed by, the laws of the State of New York without giving effect to the
principles of the conflict of laws thereof.
Section 3.4. Waivers; Amendments. The waiver by the undersigned of any of
the provisions of this Agreement or the Stock Purchase Agreement shall not
operate or be construed as a waiver of any subsequent breach. This Agreement may
be amended, and any provision of this Agreement may be waived, only by a written
amendment executed by (i) the Company and (ii) the Purchaser. Notwithstanding
the foregoing, the Company will provide the Purchaser with written notice and
sufficient information, sufficiently far in advance of a date a decision is
required, to enable such Person to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the
provisions hereof.
Section 3.5. Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect the construction and
interpretation of this Agreement
Section 3.6. Severability. The invalidity of all or any part of any
section of this Agreement shall not render invalid the remainder of such
section. If any provision of this
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Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
Section 3.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. This Agreement may contain more than one
counterpart of the signature page and may be executed by the affixing of the
signatures of each of the Parties to one of these counterpart signature pages.
All of the counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 3.8. Aggregation of Stock. All Registrable Securities, as the case
may be, held or acquired by Affiliated entities shall be aggregated for the
purpose of determining the availability of any rights under this Agreement.
Section 3.9. Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
Section 3.10. Entire Agreement. This Agreement, the Stock Purchase
Agreement (including the 3CUBE Disclosure Schedule, the Xxxx.xxx Disclosure
Schedule and the Exhibits thereto), the 3Cube Investor Rights Agreement, the
Internet Facsimile Messaging Agreement and the System Integration, Consulting
and Continuing Support Agreement contain the entire agreement of the Parties
with respect to the subject matters set forth herein or therein and supercede
any prior written or oral agreements, undertakings or arrangements between the
parties hereto, including without limitation that certain Commitment Letter and
Term Sheet, dated May 14, 1999. The Parties are not bound by any oral statements
that are made outside of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
3CUBE, INC.
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Name: Xxxx Xxxxxx
Title: President
XXXX.XXX, INC.
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Name:
Title:
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