EXHIBIT 10.52
XXXXXX.XXX, INC.
REGISTRATION RIGHTS AGREEMENT
(As of July 1, 1999)
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of July 1,
1999, by and among XXXXXX.XXX, INC. (the "Company"), a Delaware corporation, and
America Online, Inc. ("AOL"), a Delaware corporation.
RECITALS
A. The Company and AOL have entered into (i) an Interactive Services
Agreement, (ii) a Development and Services Agreement, and (iii) certain
investment transactions involving the issuance of common stock.
B. The Company has agreed to provide AOL the registration rights set
forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS. The following terms, when capitalized herein, shall have
the following meanings.
1.1 "AOL SHARES" means the shares of the Company's Common Stock which
AOL acquires from the Company in a non-registered transaction, whether
directly or upon conversion of any security, warrant or instrument acquired
from the Company in a non-registered transaction.
1.2 "BUSINESS DAYS" means any day that is not a day on which banking
institutions in the city of Austin, Texas are authorized by law, regulation
or executive order to close; and Saturdays and Sundays shall not be
considered "Business Days."
1.3 "COMMISSION" means the Securities and Exchange Commission.
1.4 "COMMON STOCK" means the common stock, par value $.001 per share,
of the Company.
1.5 "DEMAND NOTICE" means a written notice delivered to the Company
pursuant to Section 2 below demanding that the Company effect a Demand
Registration.
1.6 "DEMAND REGISTRATION" means a registration by the Company of all
or a part of the Registrable Securities under the 1933 Act pursuant to a
Demand Notice delivered in accordance with Section 2.1 of this Agreement.
1.7 "DEMANDING REGISTRABLE SECURITIES HOLDER" means the Registrable
Securities Holder(s) who has delivered a Demand Notice pursuant to Section
2.1 of this Agreement.
1.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
1.9 "EXISTING REGISTRATION RIGHTS AGREEMENT" means the Company's
Amended and Restated Registration Rights Agreement dated January 29, 1999.
1.10 "INDEMNIFIED PARTY" means each party entitled to indemnification
pursuant to Section 7.
1.11 "INDEMNIFYING PARTY" means each party required to provide
indemnification pursuant to Section 7.
1.12 "NON-DEMANDING REGISTRABLE SECURITIES HOLDER" means a
Registrable Securities Holder(s) other than the Demanding Registrable
Securities Holder.
1.12 "OTHER STOCKHOLDERS" means collectively, officers or directors
of the Company who own Common Stock, or holders of Common Stock other than
the Registrable Securities Holders or their assignees, who are entitled, by
contract with the Company, to have their Common Stock included in a
registration of the Company's securities.
1.13 "PARTICIPATING REGISTRABLE SECURITIES HOLDER" means Registrable
Securities Holder that is participating in the registration of Common Stock
pursuant to this Agreement.
1.14 "PERSON" means any individual, corporation, partnership, limited
partnership, limited liability company or other business entity.
1.15 "PIGGYBACK NOTICE" means a written notice delivered by the
Company to the Registrable Securities Holders stating that the Company
intends to conduct a Piggyback Registration, which notice shall include a
list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state
securities laws.
1.16 "PIGGYBACK REGISTRATION" means any registration by the Company
of any of its Common Stock under the 1933 Act for sale in an underwritten
public offering, other than (a) a Demand Registration or (b) a registration
on Form S-8 or Form S-4, or any other form which in the future may be
approved by the SEC in lieu of such forms for the same purposes.
1.17 "REGISTRABLE SECURITIES" means (a) the AOL Shares, and (b) any
securities issued or issuable in respect of or in exchange for any of the
AOL Shares by way of a stock dividend or stock split or in connection with
a combination of AOL Shares, recapitalization, reclassification, merger,
consolidation, or exchange offer. For purposes of this Agreement, a
security ceases to be a Registrable Security (i) when it has been
effectively registered under the 1933 Act and disposed of in a public
market transaction pursuant to the registration statement, (ii) when it has
been sold pursuant to Rule 144 (or any successor provision) under the 1933
Act, (iii) when it has been otherwise transferred and a new certificate
therefor, not bearing a legend restricting further transfer, has been
delivered by the Company following the Company's receipt of a reasonably
satisfactory opinion of counsel that the issuance and delivery of such a
certificate is legal and proper under this Agreement and applicable law or
(iv) when it is no longer outstanding.
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1.18 "REGISTRABLE SECURITIES HOLDER" means the holder(s) of any
Registrable Securities that assumes in writing the obligations of a
Registrable Securities Holder under this Agreement.
1.19 "REGISTRATION EXPENSES" means all expenses, other than Selling
Expenses, incurred in connection with any registration of securities
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of independent auditors and counsel for
the Company, blue sky fees and expenses, the fees and disbursements of one
counsel to the Registrable Securities Holders in connection with the
registration of the Registrable Securities incident to or required by any
such registration (but excluding the compensation of regular employees of
the Company, which shall be paid in any event by the Company).
1.20 "1933 ACT" means the Securities Act of 1933, as amended.
1.21 "SELLING EXPENSES" means all underwriting discounts and selling
commissions incurred in connection with any registration of securities.
2. DEMAND REGISTRATION.
2.1 DEMAND FOR REGISTRATION. If the Company shall receive from a
Registrable Securities Holder under this Agreement or the Existing
Registration Rights Agreement a Demand Notice, then, subject to Sections
2.2, the Company will, as soon as practicable, provide notice of such
Demand Notice to each Registrable Securities Holder under this Agreement or
the Existing Registration Rights Agreement and use its reasonable best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the 0000
Xxx) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of the Registrable Securities as are
identified in the Demand Notice and written notices provided to the Company
and the Demanding Registrable Securities Holder by the Non-Demanding
Registrable Securities Holders (if any) within 15 days of receipt of the
Company's notice of a Demand Notice.
2.2 EXCEPTIONS TO OBLIGATION. Notwithstanding the provisions of
Section 2.1, the Company's obligation to effect, or to take any action to
effect, any registration demanded pursuant to that Section shall be subject
to the following:
(a) The Company shall not be obligated to effect, or take any action
to effect, any registration in any particular jurisdiction in
which the Company would be required to execute a general consent
to service of process in effecting such registration,
qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be
required by the 1933 Act or applicable roles or regulations
thereunder.
(b) Except as provided in Section 2.5 and 2.6, the Company shall not
be obligated to effect, or take any action to effect, any
registration after the Company has effected two such
registrations for AOL pursuant to Section 2.1, provided that such
registrations have been declared or ordered effective and no stop
order has been
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entered with respect to such registration statements which have
not been lifted or discontinued.
(c) If prior to the receipt by the Company of the Demand Notice from
a Demanding Registrable Securities Holder referred to above, the
Company has given written notice to the Registrable Securities
Holders of the Company's intent to register in a proposed public
offering of the Company's Common Stock for it's own account under
the 1933 Act (other than a registration relating solely to
employee benefit plans or Rule 145 transactions), then, provided
thereafter the Company files the registration statement with the
Commission within 60 days after the Company has given notice of
its intent to register and provided the offering is declared or
becomes effective within 60 days after the initial filing of the
registration statement, the following shall apply:
(i) If all Registrable Securities held by a Registrable
Securities Holder are registered and sold in that public
offering as a consequence of the piggyback registration
rights arising under Section 4 below, then the right of
such Registrable Securities Holder under this Agreement to
demand registration of the Registrable Securities pursuant
to this Section 2.1 shall be extinguished.
(ii) If all Registrable Securities of a Registrable Securities
Holder are not registered and sold in that public
offering, then such Registrable Securities Holder may not
make its request under this Section 2, prior to the
earlier of (A) one hundred twenty (120) days after the
date the Company sent out the first notice of the intent
to register (provided the registration statement has not
become effective) or (B) six months after the effective
date of the registration statement.
(iii) The Company may not give any written notice of intent to
register as provided in this Section 2.2(c) prior to one
hundred eighty (180) days after it has previously given
any such notice which has led to a completed offering of
Common Stock.
(d) The Company shall not be obligated to effect, or take any action
to effect, any registration if (i) the Company delivers to the
Demanding Registrable Securities Holder, within twenty (20) days
after its receipt of a Demand Notice, an opinion (reasonably
acceptable to the Participating Registrable Securities Holders
and their counsel) of outside counsel qualified in Federal
securities law issues to the effect that all Registrable
Securities can be sold or disposed of in a single public
transaction without registration under the 1933 Act and that the
resale of such securities to any purchaser does not require
registration under the 1933 Act and (ii) the Company agrees to
remove all restrictive legends on the certificates evidencing the
Registrable Securities. The Company agrees to indemnify the
Participating Registrable Securities Holders against and to hold
them harmless from all damages, losses and liabilities (including
liability for rescission), costs and expenses (including
reasonable attorneys' fees) based upon or arising out of the
failure to comply with Section 5 of the 1933 Act as a consequence
of the Registrable Securities Holders proceeding in accordance
with such outside counsel's opinion.
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(e) The Company may delay filing a registration statement for a
period of not more than ninety (90) days after the date of
receipt of the request from a Demanding Registrable Securities
Holder if a majority of the directors then comprising the
Company's Board of Directors (including a majority of the
independent Directors) determine that compelling corporate
requirements necessitate the postponement.
(f) The Company shall, in any event, not be obligated to effect any
registration unless the anticipated aggregate offering proceeds,
net of underwriting discounts and commissions, are expected to
exceed $5,000,000.
(g) Any registration under this Agreement shall be for resale only;
the Company shall have no obligation to attempt to register the
original issuances of securities subject to options, warrants or
other derivative securities.
(h) In the event the Company is obligated to register shares
hereunder pursuant to a Demand Registration, each holder of
Registrable Securities shall have piggyback rights in such
registration.
2.3 EFFECTING REGISTRATION. Subject to the foregoing Section 2.2 and
Section 13.1, the Company shall use its reasonable best efforts to file a
registration statement covering the Registrable Securities identified in a
Demand Notice as soon as practicable after receipt of the Demand Notice,
and shall use reasonable best efforts to do all of the things required
pursuant to Section 5 below.
2.4 UNDERWRITING.
(a) If the Demanding Registrable Securities Holder intends to
distribute the Registrable Securities covered by the Demand
Notice by means of an underwriting, it shall so advise the
Company in the Demand Notice. The lead underwriter shall be
chosen by the Demanding Registrable Securities Holder, which
underwriter shall be acceptable to the Company in the exercise of
its reasonable judgment.
(b) If the Non-Demanding Registrable Securities Holders under this
Agreement and the Existing Registration Rights Agreement (if any)
wish to include shares of Common Stock held by it in the
underwritten offering, it shall notify the Demanding Registrable
Securities Holder in writing within thirty (30) days after
receiving such Registrable Securities Holder's Demand Notice of
the number of shares it wishes to include in the registration and
the Demanding Registrable Securities Holder shall include such
shares in the underwriting. If the Company wishes to include, in
the underwritten registration, Common Stock to be sold for the
account of the Company it shall notify the Demanding Registrable
Securities Holder in writing within thirty (30) days after the
Company has received the Demand Notice of the number of shares
the Company wishes to include in the registration. If any Other
Stockholders of the Company wish to include shares of Common
Stock held by them in the underwritten offering, they shall
notify the Demanding Registrable Securities Holder in writing
within thirty (30) days after the Company has received the
Registrable Securities Holder's Demand Notice. In such event, (i)
the Company shall offer to include the shares of the
Participating Registrable Securities Holder and the Non-Demanding
Registrable Securities Holders under this Agreement and the
Existing Registration Rights Agreement (if any) in the
underwriting and shall condition such
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offer on their acceptance of the further applicable provisions of
this Agreement, and (ii) the Company shall (together with the
Registrable Securities Holders and the Other Stockholders
proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Demanding Registrable Securities Holders as
set forth above.
(c) Notwithstanding any other provision of this Section 2.4, and
subject to Section 4 of the Existing Registration Rights
Agreement if the underwriter advises the Registrable Securities
Holders in writing that marketing factors require a limitation on
the number of shares to be underwritten,
(i) Common Stock held by Other Stockholders shall be excluded
from such registration to the extent so required by such
limitation in proportion, as nearly as practicable, to the
respective amounts of securities which each such Other
Stockholder and Participating Registrable Securities
Holder has a contractual right to be included;
(ii) If a limitation of the number of shares is still required,
the number of shares of Common Stock which the Company has
requested to be included in the registration and
underwriting shall be reduced or eliminated, as required;
(iii) If a limitation on the number of shares is still required,
Common Stock held by the Demanding Registrable Securities
Holders and the Participating Registrable Securities
Holder shall be excluded from such registration to the
extent so required by such limitation in proportion, as
nearly as practicable, to the respective amounts of
Registrable Securities which each such Registrable
Securities Holder holds. No securities excluded from the
underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any
Other Stockholder or the Participating Securities Holder
has requested inclusion in such registration as provided
above disapproves of the terms of the underwriting, such
Other Stockholder or Participating Securities Holder may
elect to withdraw therefrom by written notice to the
Company, the underwriter and the Demanding Registrable
Securities Holder. The securities so withdrawn shall also
be withdrawn from registration.
(d) If the Registrable Securities being registered pursuant to this
Section 2 are not to be distributed by means of an underwriting,
then the provisions of Section 3 shall apply.
2.5 EXCHANGE ACT REGISTRATION AND FORM S-3. Within thirty days after
the effectiveness of the registration statement pursuant to which the
Company first registers Common Stock under the 1933 Act, the Company shall
register its Common Stock under Section 12 of the Exchange Act and use its
reasonable best efforts to maintain that Exchange Act registration. After
the Company has qualified for the use of Form S-3, then (i) the Company
shall use Form S-3 for any 7 registration demanded by a Demanding
Registrable Securities Holder pursuant to Section 2.1 and (ii) Section
2.2(b) shall not be applicable; provided, that the Registrable Securities
Holders shall not be entitled to require the Company to register
Registrable Securities on a Form S-3 which has been declared effective,
pursuant to a Demand Notice delivered under Section 2.1, more than once in
any twelve month period.
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2.6 WITHDRAWAL. A Demanding Registrable Securities Holder may
withdraw a Demand Notice prior to the effective date of the registration
statement if a material adverse change has occurred in the condition,
business or prospects of the Company and its subsidiaries from that known
to the Demanding Registrable Securities Holder at the time of delivery of
its Demand Notice. In such event, the Demanding Registrable Securities
Holder's right to demand registration pursuant to Section 2.1 shall be
reinstated.
3. SELLING RESTRICTIONS. The following provisions shall apply if the
registration demanded pursuant to Section 2.1 is not an underwritten
registration:
3.1 NOTICE TO COMPANY. The Demanding Registrable Securities Holder
shall notify the Company, at least two (2) Business Days prior to any
disposition of Registrable Securities pursuant to the registration
statement, of its intent to dispose of such Registrable Securities. Each
Other Stockholder and Participating Registrable Securities Holder whose
shares shall have been registered shall provide a similar notice to the
Company with respect to any shares which such Other Stockholder or
Participating Registrable Securities Holder intends to dispose of pursuant
to the registration statement. Such notice shall be in writing, by
facsimile or by an actual telephone conversation with either the Company's
Chief Financial Officer, General Counsel or Director of Investor Relations,
at the address, facsimile number or the phone number, as the case may be,
of the Company, all as set forth in Section 12 below. The Company will
exert reasonable efforts to respond to such notice by the next Business
Day, but in any event, the Company shall respond no later than the second
Business Day following the date of receipt. Such response shall consist of
one of the following: (a) an oral or written confirmation that the Company
knows of no reason why the Demanding Registrable Securities Holder, the
Participating Registrable Securities Holder or the Other Stockholder should
not proceed with the proposed sale or disposition; or (b) a notification
that the proposed disposition must be delayed for a period of up to thirty
(30) days as provided in Section 3.2 below; or (c) a confirmation from
either the Chief Financial Officer or the General Counsel of the Company
that the Company requires a limited time, not to exceed three (3) Business
Days following the receipt of the Company's receipt of the notice, within
which to determine which of the foregoing responses is appropriate under
the circumstances. (d) The failure by the Company to respond by the end of
the second Business Day (or the end of the third Business Day thereafter if
a confirmation pursuant to Section 3.1 (c) has been delivered) shall be
deemed to waive any objection to the proposed sale or disposition.
3.2 RESTRICTION ON SALE. Following the effectiveness of a non-
underwritten registration, the Company may restrict disposition of
Registrable Securities or Common Stock, in which event the holders will not
dispose of those securities for the period designated by the Company, but
not exceeding thirty days; provided that: (a) the Company shall have
delivered a notice in writing to the Demanding Registrable Securities
Holder(s), the Participating Registrable Securities Holder and such Other
Stockholders stating that a delay in the disposition of Registrable
Securities or other shares is necessary because the Company, in its
reasonable judgment, exercised in good faith, has determined that such
sales would require public disclosure by the Company of material nonpublic
information that the Company deems advisable not to disclose at that time;
and (b) the Company shall exert commercially reasonable efforts to amend
the registration statement or amend or supplement the prospectus relating
thereto, if necessary, and to take all other actions necessary to allow the
proposed disposition to take place as promptly as practicable after the
conditions referred to therein have ceased to exist. The Company agrees to
use all commercially reasonable efforts to keep the registration statement,
as amended pursuant to
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this Section 3.2, effective for an additional period of time equal to the
period during which sales were restricted pursuant to this Section 3.2.
3.3 DISCONTINUANCE OF SALE. Each Registrable Securities Holder and
each Other Stockholder whose shares are included in any registration
contemplated hereunder shall agree as a condition to the inclusion of their
shares, that upon receipt of any notice from the Company specified in
Section 5.4(a) below, such Person shall forthwith discontinue all sales and
distributions of Registrable Securities pursuant to the then-current
prospectus until such Person receives copies of a supplemental or amended
prospectus as contemplated by Section 3.2, or until such Person is advised
in writing by the Company that the use of the prospectus may be resumed,
and, if so directed by the Company, such Person will deliver to the Company
all copies then in the possession of such Shareholder of the prospectus in
effect with respect to the Registrable Securities or other shares at the
time of such notice. The Company shall promptly take all such action as may
be necessary or appropriate, including, without limitation, the filing of
an amendment to the registration statement and/or the filing of an amended
prospectus or a prospectus supplement, to limit the duration of any
discontinuance with respect to the sale and distribution of Registrable
Securities pursuant to this Section 3.3, and shall keep the registration
statement, as amended, effective for an additional period of time equal to
the period during which sales were required to be discontinued.
4. PIGGYBACK REGISTRATION.
4.1 INCLUSION IN OFFERING. If at any time during the period
commencing on the date of this Agreement and ending on the third
anniversary of the closing date of its initial public offering of its
equity securities under the 1933 Act, the Company shall determine to
conduct a Piggyback Registration either for its own account or the account
of a security holder or holders (other than a Registrable Securities
Holder), the Company will use its reasonable best efforts to: (a) promptly
deliver a Piggyback Notice to each Non-Demanding Registrable Securities
Holder; and (b) include in such registration (and any related qualification
under blue sky laws or other compliance) and in any underwriting involved
therein all of the Registrable Securities specified in a written request or
requests made by a Participating Registrable Securities Holder within
fifteen (15) business days after receipt of the Piggyback Notice from the
Company.
4.2 UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Participating Registrable Securities Holders in
the Piggyback Notice. In such event the right of a Registrable Securities
Holder to registration pursuant to this Section 4 shall be conditioned upon
its participation in such underwriting and the inclusion of the
Participating Registrable Securities in the underwriting. The Registrable
Securities Holder shall (together with the Company and any Other
Stockholders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for the underwriting by the Company. If a
Participating Registrable Securities Holder or any Other Stockholder
disapproves of the terms of any such underwriting, such Person may elect to
withdraw therefrom by written notice to the Company and the underwriter.
Any Registrable Securities or other securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and the
allocation (if any) pursuant to the following sections shall be adjusted
accordingly. Any such withdrawal shall be without prejudice to the right of
a Registrable Securities Holder to include Registrable Securities in future
offerings pursuant to this Section 4.
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4.3 PRIORITY IN PRIMARY REGISTRATIONS. If a Piggyback Registration is
an underwritten offering 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, the Company will, subject to Section 4 of
the Existing Registration Rights Agreement, include securities in such
registration in the following order of priority: (i) there shall first be
included all securities which the Company proposes to sell; (ii) subject to
Section 13.1, to the extent additional shares may be included, there shall
next be included all Registrable Securities requested to be included in
such registration by the Participating Registrable Securities Holders pro
rata based on the respective number of shares of Common Stock held by each
Participating Registrable Securities Holder and (iii) to the extent
additional shares may be included, there shall next be included the Common
Stock requested to be included in such registration by Other Stockholders,
pro rata based on the respective number of shares of Common Stock held by
each Other Stockholder.
4.4 PRIORITY IN SECONDARY REGISTRATIONS. If a Piggyback Registration
is an underwritten secondary offering 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, the Company
will, subject to Section 4 of the Existing Registration Rights Agreement,
include securities in such registration in the following order of priority:
(i) subject to Section 13.1, there shall first be included Common Stock
requested to be included in such registration by Other Stockholders and any
Participating Registrable Securities Holders, pro-rata, based on their
respective number of shares of Common Stock, and (ii) to the extent
additional shares may be included, there shall be included additional the
Company securities which the Company has requested to be included in such
registration.
4.5 WITHDRAWAL OR DELAY OF REGISTRATION. The provisions of Sections
4.1 through 4.4 notwithstanding, if, at any time after delivering a
Piggyback Notice and prior to the effective date of the registration
statement for such Piggyback Registration the Company shall determine for
any reason not to register or to delay registration of the securities
covered thereby, the Company may, at its election, give written notice of
such determination the Participating Registrable Securities Holders and,
thereupon (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation, if any, to
pay Registration Expenses in connection therewith), without prejudice,
however, to the right of the Participating Registrable Securities Holders
to include Registrable Securities in a subsequent registration and (ii) in
the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Securities, for the same period as the
delay in registering the other securities covered by the registration
statement.
5. REGISTRATION PROCEDURES. In the case of any Demand Registration or
Piggyback Registration effected by the Company, upon request the Company will
keep the Registrable Securities Holders advised in writing as to the initiation
of each registration and as to the completion thereof. At its expense, the
Company will use its reasonable best efforts to:
5.1 REGISTRATION STATEMENT. Prepare and file with the Securities and
Exchange Commission such amendments and supplements to the registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement
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effective for a period of one hundred twenty (120) days or until the
Participating Registrable Securities Holders have completed the
distribution described in the registration statement relating thereto
(which period shall be extended as contemplated in Section 3.2(b) or
Section 3.3), whichever first occurs, and comply with the provisions of the
1933 Act with respect to the disposition of all securities covered by such
registration statement during such period.
5.2 BLUE SKY QUALIFICATION. Subject to Section 2.2(a) above, to
register and qualify the Registrable Securities included in the
registration under the securities or blue sky laws of such states and the
District of Columbia the Demanding Registrable Securities Holder reasonably
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Participating Registrable Securities
Holders to consummate the disposition in such states and the District of
Columbia of the Registrable Securities so included.
5.3 FURNISH PROSPECTUSES. Furnish the number of prospectuses
(including preliminary prospectuses conforming to the requirements of the
1933 Act and rules and regulations thereunder) and other documents incident
thereto as The Registrable Securities Holders from time to time may
reasonably request.
5.4 NOTIFICATION. (a) Notify the Participating Registrable
Securities Holders, at any time when a prospectus relating to Registrable
Securities covered by a registration statement is required to be delivered
under the 1933 Act, of the happening of any event; as a result of which the
prospectus included in such registration statement includes an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of circumstances then existing. (b) Notify the
Participating Registrable Securities Holders and the managing underwriters,
if any, promptly, and (if requested by any such person) confirm such advice
in writing, (i) when the registration statement, the prospectus or any
prospectus supplement or post-effective amendment, has been filed, and,
with respect to the registration statement or any post-effective amendment,
when the same has become effective; (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of a registration statement
or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose; the
Company shall promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain a withdrawal of any stop order
should one be issued; and (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of a registration statement of any Registrable
Securities for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose.
5.5 OPINIONS AND COMFORT LETTERS. To the extent requested, furnish
to the underwriter, in an underwritten offering, or to the Registrable
Securities Holders, in a non-underwritten offering, (i) a signed opinion of
the Company's counsel, and (ii) "comfort" letters signed by the Company's
independent public accountants who have examined and reported on the
Company's financial statements included in the registration statement, to
the extent permitted by the American Institute of Certified Public
Accountants, coveting the same matters with respect to the registration
statement (and prospectus included therein) and with respect to the events
subsequent to the date of the financial statements, as are customarily
covered in opinions of counsel and in accountants' "comfort" letters
delivered to the underwriters in underwritten public offerings of
securities.
5.6 EXCHANGE OR NASDAQ LISTING. Use reasonable efforts to cause all
Registrable Securities included in the registration to be listed or
admitted for trading on such
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exchanges or markets (including but not limited to the NASDAQ Stock Market,
if applicable) as the Common Stock is otherwise listed or admitted for
trading.
5.7 EARNINGS STATEMENT. Otherwise use all reasonable efforts to
comply with all applicable roles 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 earning statement shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder.
6. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
this Agreement shall be borne by the Company, and all Selling Expenses
shall be borne by the holders of the securities so registered (including
the Registrable Securities Holders, Other Stockholders and the Company, to
the extent securities are offered for its account) pro rata on the basis of
the gross sales proceeds received by each in the offering.
7. INDEMNIFICATION.
7.1 COMPANY INDEMNIFICATION. The Company shall indemnify and hold
harmless, to the fullest extent permitted by law, each seller of
Registrable Securities, any underwriter for such registration and each
person or entity, if any, controlling such seller or underwriter within the
meaning of the 1933 Act or the Exchange Act, against all losses, claims,
damages, liabilities and expenses (including reasonable costs of
investigation and legal expenses) to which such seller, underwriter or
controlling person or entity, as the case may be, may become subject under
the 1933 Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon any of the following: (a)
any untrue statement or alleged untrue statement of a material fact
contained in any registration statement, any prospectus or any amendments
or supplements thereto; (b) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; or (c) any violation or alleged violation by the
Company, in connection with such registration, of the 1933 Act, the
Exchange Act, any state securities law or any role or regulation
promulgated under the 1933 Act, the Exchange Act or any state securities
law; provided, however, that the Company shall not be liable in any such
case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon any untrue statement or omission
made in reliance upon and in conformity with written information furnished
for use in connection with such registration by any such seller,
underwriter or controlling person or entity.
7.2 INDEMNIFICATION BY REGISTRABLE SECURITIES HOLDERS. Each
Registrable Securities Holder shall indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its officers, directors,
employees, representatives and agents, each Person who controls (within the
meaning of the 0000 Xxx) the Company, any underwriter, each other
Registrable Securities Holder and each Other Stockholder whose shares have
been included in any registration in which Registrable Securities have been
included, against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and legal expenses) resulting
from such Registrable Security Holder's (i) untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any amendment or supplement thereto, and (ii) omission or
alleged omission of a material fact required to be stated
11
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, to the extent
that such untrue statement or alleged untrue statement or omission or
alleged omission is made in reliance upon and in conformity with written
information furnished to the Company by such Registrable Securities Holder
expressly for 13 use therein, or (iii) if such offering is not an
underwritten offering, from such Registrable Securities Holder's failure to
deliver a copy of the registration statement, prospectus or any amendment
or supplement thereto after the Company has furnished such Registrable
Securities Holder with a sufficient number of copies of the same; provided,
however, the obligation of a Registrable Security Holder to indemnify will
be several, not joint and several among the Registrable Securities Holders,
and in no event shall a Registrable Securities Holder's aggregate
indemnification obligation under this Section 7.2 exceed the net proceeds
from the offering received by such Registrable Securities Holder.
7.3 NOTICE OF CLAIM. Each Indemnified Party shall give notice to
each Indemnifying Party promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who will conduct the defense of such claim or
litigation at its expense, is approved by the Indemnified Party (whose
approval will not be unreasonably withheld or delayed); and provided,
further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
except to the extent that its defense of the claim or litigation involved
is prejudiced by such failure. The Indemnified party may participate in
such defense at such party's expense. No Indemnifying Party, in the defense
of any such claim or litigation, except with the consent of each
Indemnified Party, shall consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect of any claim or litigation, and no
Indemnified Party will consent to entry of any judgment or settle any claim
or litigation without the prior written consent of the Indemnifying Party.
Each Indemnified Party shall furnish such information regarding himself,
herself or itself and the claim in question as the Indemnifying Party may
reasonably request and as shall be reasonably required in connection with
the defense of such claim and litigation resulting therefrom.
7.4 CONTRIBUTION. If for any reason the indemnification provided for
in this Section 7 from an Indemnifying Party, although otherwise applicable
by its terms, is determined by a court of competent jurisdiction to be
unavailable to an Indemnified Party hereunder, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by the Indemnified Parties as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of such Indemnifying Party and
the Indemnified Parties in connection with the actions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party and the Indemnified Parties shall be determined by reference, among
other things, to whether any action in question, including any untrue or
alleged untrue statement of a material fact, has been made by, or relates
to information supplied by, such Indemnifying Party or the Indemnified
Parties, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding. Notwithstanding the foregoing, in no event
shall the amount contributed by a Registrable Securities Holder exceed
12
under this Section 7.4 exceed the net proceeds from the offering received
by such Registrable Securities Holder.
7.5 FROM OTHER STOCKHOLDERS. The Company agrees that, to the extent
that it shall grant to Other Stockholders the right to have the Company's
securities held by them included in any registration of the Company's
securities, or to require the Company to register their securities, it
shall require as a condition to such grant that such Other Stockholders
agree to indemnify the Company and the Registrable Securities Holders, and
the officers, directors, employees, representatives and agents of each as
well as each Person who controls (within the meaning of the 0000 Xxx) each,
with respect to any registration of their securities, on terms
substantially identical to that provided by the Registrable Securities
Holders in Section 7.2.
8. LOCK UP AGREEMENTS. In consideration for the Company agreeing to its
obligations under this Agreement, in connection with any initial public offering
(whether or not a Registrable Securities Holder is participating in such
registration), upon the written request of the Company and the underwriters
managing any underwritten offering of the Company's securities, Registrable
Securities Holders agree not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed ninety (90) days from the effective date of such
registration) as the Company and the underwriters may specify, so long as the
Registrable Securities Holders and all executives, officers and directors of the
Company are bound by a comparable obligation provided, however, that nothing
herein shall prevent the Registrable Securities Holders from making a
distribution of Registrable Securities to its shareholders that is otherwise in
compliance with applicable securities laws, so long as such distributees agree
to be so bound.
9. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Registrable Securities Holders the benefits of Rule 144 and any other rule or
regulations of the Securities and Exchange Commission that may at any time
permit a holder to sell securities of the Company to the public without
registration, the Company agrees to use its reasonable best efforts to do all of
the following at any time after it shall become subject to the reporting
requirements of Sections 13 and 14 of the Exchange Act:
9.1 PUBLIC INFORMATION. Make and keep public information available as
contemplated in Rule 144, at all times.
9.2 SEC REPORTS. File with the Securities and Exchange Commission all
reports and other documents required of the Company under the 1933 Act and
the Exchange Act.
9.3 RULE 144 STATEMENT. Furnish to the Registrable Securities
Holders, so long as each of them holds any Registrable Securities,
forthwith upon request, a written statement by the Company that it as to
whether or not it has complied with the reporting requirements of Rule 144,
the 1933 Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so
filed with the Securities and Exchange Commission by the Company as may be
reasonably requested in availing any holder, under any rule or regulation
of the Securities and Exchange Commission, of the right to sell any such
Registrable Securities without registration.
10. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The right to cause the
Company to register Registrable Securities in a Demand Registration granted
under Section 2, the right to
13
include Registrable Securities in a Piggyback Registration granted under Section
4 and the other rights granted to a Registrable Securities Holders hereunder may
be transferred or assigned by such Registrable Securities Holder to one or more
transferees or assignees of the Registrable Securities Holder, provided that the
Company is given written notice by such Registrable Securities Holder at the
time of or within a reasonable time after said transfer or assignment, stating
the name and address of each transferee or assignee and identifying the number
of shares of Registrable Securities with respect to which such registration
rights are being transferred or assigned, and provided further that the
transferee or assignee of such rights assumes in writing the obligations of the
Registrable Securities Holder under this Agreement. Notwithstanding the
foregoing, the Company shall have no obligation to recognize any assignment of
Registrable Securities by a Registrable Securities Holder, nor to cause
Registrable Securities to be transferred on its books or records, unless such
transfer is made in accordance with the registration or qualification
requirements of the 1933 Act and all applicable blue sky or other state
securities laws or pursuant to available exemptions therefrom (as evidenced by
an opinion of counsel satisfactory in form and substance to counsel for the
Company).
11. INFORMATION FROM REGISTRABLE SECURITIES HOLDERS. Each Registrable
Securities Holder shall furnish to the Company such information regarding such
Registrable Securities Holder, the Registrable Securities and the distribution
proposed by such Registrable Securities Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
12. COVENANTS OF THE COMPANY.
(a) For four (4) years from the date hereof, the Company shall
provide AOL with copies of all notices, minutes, information and other
materials (collectively, the "Materials") of or for meetings of the
Company's Board of Directors that the Company provides to its directors
generally, at or about the same time as such materials are delivered to the
directors, and shall allow an AOL designee to attend all meetings of the
Board of Directors in a non-voting, observer capacity as a representative
of AOL (the "Representative"); provided, however, that the Company shall
not be required to provide AOL with Materials, and the Representative may
be excluded from access to any meeting, or any portion thereof, if the
Chairman or the President of the Company or a majority of the Board of
Directors of the Company reasonably determines that such access or
disclosure is not in the Company's interest, including, without limitation,
if (a) such provision of Materials or such access would adversely affect
the attorney-client privilege between the Company and its counsel; (b) the
Company's interest in the trade secrets and other intellectual property
embodied by such Materials or to be disclosed in such meeting conflicts or
would potentially conflict with similar rights claimed by, or business
interests of, AOL; or (c) disclosure of confidential information of third
parties in confidentiality to such third parties, provided that any such
exclusion from access or disclosure is applied similarly to all other
observer representatives of any other stockholder of the Company. The
initial observer shall be Xxxxx Xxxx, but from time to time, AOL may
appoint another senior executive of AOL to act as a replacement
Representative upon the written consent of the Company, not to be
unreasonably withheld. Each such observer shall, upon request, confirm to
the Company in writing that all Materials and other information (written or
oral) received as an observer will be maintained in confidence. Upon
request by AOL, the Company will terminate delivery of Materials to AOL.
The foregoing shall not apply to board committees (e.g., an Executive
Committee) formed by the board by delegation.
(b) AOL shall enjoy the rights set forth in Section 12(a) for the
period provided for therein for so long as AOL owns, or has the opportunity
to earn warrants that upon exercise
14
would yield, capital stock of the Company representing at least three
percent (3%) of the outstanding voting stock of the Company on a Fully
Diluted Basis (as defined below) (the "Minimum Interest"). Such rights
shall terminate at such time as AOL does not own, or have the opportunity
to own, the Minimum Interest, but shall be renewed at such time that AOL
reacquires the Minimum Interest or the opportunity thereto, and shall
continue (subject to Section 12(a)) for and during such subsequent
period(s) as AOL maintains, or has the opportunity to maintain, the Minimum
Interest. "Fully Diluted Basis" means assuming and taking into account, as
of the date of the calculation, (i) all outstanding shares of Common Stock
and all outstanding shares of preferred stock of the Company which are not
convertible into Common Stock (if any), (ii) all shares of Common Stock
into which all outstanding shares of preferred stock of the Company can
then be converted, (iii) any other security convertible into or
exchangeable for, directly or indirectly, Common Stock or any security
convertible into Common Stock, (iv) the exercise of all outstanding
options, warrants and similar rights granted by the Company (except for the
warrants to purchase Common Stock acquired by AOL pursuant to the three
Warrant Agreements of even date herewith), and (v) the exercise of all
options, warrants and rights that could be granted by the Company pursuant
to any then existing stock option or similar agreement, plan or arrangement
of the Company, and the exercise of options to purchase shares of Common
Stock to be granted under stock option plans to be implemented by the
Company after the date of this Agreement.
13. MISCELLANEOUS.
13.1 NO INCONSISTENT AGREEMENT; COORDINATION WITH EXISTING
REGISTRATION RIGHTS AGREEMENT. The rights granted to the Registrable
Securities Holders in this Agreement are subordinate to the rights granted
under the Existing Registration Rights Agreement, and any conflict will be
resolved in favor of the holders of the Registrable Securities thereunder.
The Company will not hereafter enter into any agreement with respect to its
securities which violates the rights granted to the Registrable Securities
Holders in this Agreement.
13.2 AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and of the holders of a majority of the
Registrable Securities.
13.3 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and permitted assigns.
13.4 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
13.5 REMEDIES. The parties hereto agree and acknowledge that money
damages may not be any adequate remedy for any breach of the provisions of
this Agreement and that any party to this Agreement may apply to any court
of law or equity of competent jurisdiction (without posting bond or other
security) for specific performance and for other injunctive or equitable
relief in order to enforce or prevent violation Of the provisions of this
Agreement.
15
13.6 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.7 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
13.8 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the state of Delaware without regard to choice of law
principles which would require the application of the laws of any other
jurisdiction.
13.9 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements,
representations, warranties, statements, promises, information,
arrangement, and understandings, whether oral or written, express or
implied, with respect to the subject matter hereof.
13.10 NOTICES. Any and all notices and other communications hereunder
shall be in writing addressed to the parties at the addresses specified
below or such other addresses as either party may direct by notice given in
accordance with this section, and shall be delivered in one of the
following manners' (i) by personal delivery, in which case notice shall be
deemed to have been duly given when delivered; (ii) by certified mail,
return receipt requested, with postage prepaid, in which case notice shall
be deemed to have been duly given on the date indicated on the return
receipt; (iii) by reputable delivery service (including, by way of example
and not limitation, Federal Express, UPS and DHL) which makes a record of
the date and time of delivery, in which case notice shall be deemed to have
been duly given on the date indicated on 17 the delivery service's record
of delivery, or (iv) by fax transmission to the fax numbers given below,
with confirmation of good receipt and confirmed by letter to the addresses
set forth below, in which case notice shall be deemed to have been duly
given on the date indicated in the confirmation of fax transmission (or the
next Business Day if such date is not a Business Day or the transmission is
made after business hours):
if to the Company:
xxxxxx.xxx, Inc.
0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, President & CEO
Fax: (000) 000-0000
if to AOL:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
13.11 LEGEND. Each certificate representing shares of Common Stock
that are subject to this Agreement shall bear a legend substantially in the
following:
16
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT RELATING THE ISPOSITION OF SECURITIES AND
(3) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.
THESE SECURITIES ARE ALSO SUBJECT TO THE PROVISIONS OF A REGISTRATION
RIGHTS AGREEMENT DATED AS OF JULY 1, 1999 AND A COMPLETE AND CORRECT
COPY OF THIS AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF THE CORPORATION AND WILL BE FURNISHED UPON WRITTEN REQUEST
AND WITHOUT CHARGE.
17
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
AMERICA ONLINE, INC. XX.XXXX.XXX, INC.
By:
------------------------------------- -----------------------------------
Its: Xxxxxx X. Xxxxxxx, President and
------------------------------------ CEO
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