EXHIBIT 99.4
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
This AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT dated as of September 9,
2002 is entered into by and among Engage, Inc., a Delaware corporation (formerly
Engage Technologies, Inc., the "Company"), and CMGI, Inc. (the "Investor").
RECITALS
WHEREAS, the Company and the Investor are party to that certain Transaction
Agreement of even date herewith (the "Transaction Agreement"), pursuant to which
the Company issued the Warrant (as defined in the Transaction Agreement) to the
Investor;
WHEREAS, in order to induce the Investor to enter into the Transaction
Agreement, the Company has agreed to provide for certain arrangements with
respect to the registration under the Securities Act of 1933, as amended, of the
shares of capital stock of the Company purchasable upon exercise of this
Warrant;
WHEREAS, the Company and the Investor are party to that certain Investor Rights
Agreement, dated as of July 23, 1999, as amended (the "Prior Rights Agreement");
and
WHEREAS, in connection herewith, the parties have agreed to amend and restate
the Prior Rights Agreement in its entirety in the manner set forth herein:
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement and the Transaction Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree that the Prior Rights Agreement be and hereby is amended
and restated in its entirety as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or any other federal
agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Other Holders" shall have the meaning set forth in Section 2.2(b).
"Prospectus" means the prospectus included in any Registration Statement, as
amended or supplemented by an amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
"Registration Statement" means a registration statement filed by the Company
with the Commission for a public offering and sale of securities of the Company
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 2.4.
"Registrable Shares" means (i) the shares of Common Stock issued to the Investor
from time to time upon the exercise of the Warrant; and (ii) any other shares of
Common Stock issued in respect of such shares of Common Stock (because of stock
splits, stock dividends, reclassifications, recapitalizations or similar
events); provided, however, that shares of Common Stock which are Registrable
Shares shall cease to be Registrable Shares upon (a) any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act or (b) any sale in
any manner to a person or entity which, by virtue of Section 4 of this
Agreement, is not entitled to the rights provided by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Commission issued under
such Act, as they each may, from time to time, be in effect.
"Selling Stockholder" means any Stockholder owning Registrable Shares included
in a Registration Statement.
"Stockholders" means the Investor and any persons or entities to whom the rights
granted under this Agreement are transferred by the Investor, its successors or
assigns, pursuant to Section 4 hereof.
2. REGISTRATION RIGHTS.
2.1 [INTENTIONALLY OMITTED]
2.2 INCIDENTAL REGISTRATION.
(a) Whenever the Company proposes to file a Registration Statement at any time
and from time to time, it will, prior to such filing, give written notice to all
Stockholders of its intention to do so; provided, that no such notice need be
given if no Registrable Shares
are to be included therein as a result of a determination of the managing
underwriter pursuant to Section 2.2(b). Upon the written request of a
Stockholder or Stockholders given within 20 days after the Company provides such
notice (which request shall state the intended method of disposition of such
Registrable Shares), the Company shall use its best efforts to cause all
Registrable Shares which the Company has been requested by such Stockholder or
Stockholders to register to be registered under the Securities Act to the extent
necessary to permit their sale or other disposition in accordance with the
intended methods of distribution specified in the request of such Stockholder or
Stockholders; provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this Section 2.2 without
obligation to any Stockholder.
(b) If the registration for which the Company gives notice pursuant to Section
2.2(a) involves an underwriting, the Company shall so advise the Stockholders as
a part of the written notice given pursuant to Section 2.2(a). In such event,
the right of any Stockholder to include its Registrable Shares in such
registration pursuant to Section 2.2 shall be conditioned upon such
Stockholder's participation in such underwriting on the terms set forth herein.
All Stockholders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for the underwriting by the Company.
Notwithstanding any other provision of this Section 2.2, if the managing
underwriter determines that the inclusion of all shares requested to be
registered would adversely affect the offering, the Company may limit the number
of Registrable Shares to be included in the registration and underwriting. The
Company shall so advise all holders of Registrable Shares requesting
registration, and the number of shares that are entitled to be included in the
registration and underwriting shall be allocated in the following manner. The
securities of the Company held by holders other than Stockholders and other
stockholders entitled to include shares therein ("Other Holders") shall be
excluded from such registration and underwriting to the extent deemed advisable
by the managing underwriter, and, if a further limitation on the number of
shares is required, the number of shares that may be included in such
registration and underwriting shall be allocated among all Stockholders and
Other Holders requesting registration in proportion, as nearly as practicable,
to the respective number of shares of Common Stock which they held at the time
the Company gives the notice specified in Section 2.2(a). If any Stockholder or
Other Holder would thus be entitled to include more securities than such holder
requested to be registered, the excess shall be allocated among other requesting
Stockholders and Other Holders pro rata in the manner described in the preceding
sentence. If any holder of Registrable Shares or any Other Holder disapproves of
the terms of any such underwriting, such person may elect to withdraw therefrom
by written notice to the Company, and any Registrable Shares or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Notwithstanding the foregoing, the Company shall not be required, pursuant
to this Section 2.2, to include any Registrable Shares in a Registration
Statement if such Registrable Shares can then be sold pursuant to Rule 144(k)
under the Securities Act and represent less than 1% of the then outstanding
shares of Common Stock.
2.3 REGISTRATION PROCEDURES.
(a) If and whenever the Company is required by the provisions of this Agreement
to use its best efforts to effect the registration of any Registrable Shares
under the Securities Act, the Company shall:
(i) [INTENTIONALLY OMITTED]
(ii) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to comply with the
provisions of the Securities Act (including the anti-fraud provisions thereof)
and to keep the Registration Statement effective for 12 months from the
effective date or such lesser period until all such Registrable Shares are sold;
(iii) as expeditiously as possible furnish to each Selling Stockholder
such reasonable numbers of copies of the Prospectus, including any preliminary
Prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such Selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by such Selling Stockholder;
(iv) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the Selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the Selling Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (iv) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
(v) as expeditiously as possible, cause all such Registrable Shares to
be listed on each securities exchange or automated quotation system on which
similar securities issued by the Company are then listed; and
(vi) promptly make available for inspection by the Selling
Stockholders, any managing underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant or other agent
retained by any such underwriter or selected by the Selling Stockholders, 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 seller,
underwriter, attorney, accountant or agent in connection with such Registration
Statement.
(b) If the Company has delivered a Prospectus to the Selling Stockholders and
after
having done so the Prospectus is amended to comply with the requirements of the
Securities Act, the Company shall promptly notify the Selling Stockholders and,
if requested, the Selling Stockholders shall immediately cease making offers of
Registrable Shares and return all Prospectuses to the Company. The Company shall
promptly provide the Selling Stockholders with revised Prospectuses and,
following receipt of the revised Prospectuses, the Selling Stockholders shall be
free to resume making offers of the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is advisable to
suspend use of a Prospectus included in a Registration Statement due to pending
material developments or other events that have not yet been publicly disclosed
and as to which the Company believes public disclosure would be detrimental to
the Company, the Company shall notify all Selling Stockholders to such effect,
and, upon receipt of such notice, each such Selling Stockholder shall
immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus.
2.4 ALLOCATION OF EXPENSES. The Company will pay all Registration Expenses for
all registrations under this Agreement. For purposes of this Section, the term
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company and the fees and expenses of one counsel selected by the
Selling Stockholders to represent the Selling Stockholders, state Blue Sky fees
and expenses, and the expense of any special audits incident to or required by
any such registration, but excluding underwriting discounts, selling commissions
and the fees and expenses of Selling Stockholders' own counsel (other than the
counsel selected to represent all Selling Stockholders).
2.5 INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the seller of such Registrable Shares, each underwriter of such
Registrable Shares, and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act or the Exchange Act against
any losses, claims, damages or liabilities, joint or several, to which such
seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Company will
reimburse such seller, underwriter and each such controlling person for any
legal or any other expenses reasonably incurred by such seller, underwriter or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will 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 made
in such Registration Statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of such
seller, underwriter or controlling person specifically for use in the
preparation thereof.
(b) In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable Shares,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors and officers and each underwriter (if any) and each person, if
any, who controls the Company or any such underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company, such directors and
officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of a Stockholder hereunder
shall be limited to an amount equal to the net proceeds to such Stockholder of
Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section (the "Indemnified
Party") shall give notice to the party required to provide indemnification (the
"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
shall conduct the defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld); 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
under this Section except to the extent that the Indemnifying Party is adversely
affected by such failure. The Indemnified Party may participate in such defense
at such party's expense; provided, however, that the Indemnifying Party shall
pay such expense if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between the Indemnified Party and any other party
represented by such counsel in such proceeding; provided further that in no
event shall the Indemnifying Party be required to pay the expenses of more than
one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which 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 such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.
(d) In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Section 2.5 is due in accordance
with its terms but for any reason is held to be unavailable to an Indemnified
Party in respect to any losses, claims, damages and liabilities referred to
herein, then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities to which such
party may be subject in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Stockholders on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Stockholders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact related to information supplied by the Company
or the Stockholders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Stockholders agree that it would not be just and equitable
if contribution pursuant to this Section 2.5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph of Section 2.5, (a) in no case shall any one Stockholder be
liable or responsible for any amount in excess of the net proceeds received by
such Stockholder from the offering of Registrable Shares and (b) the Company
shall be liable and responsible for any amount in excess of such proceeds;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve such party from any other
obligation it or they may have thereunder or otherwise under
this Section. No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.
2.6 [INTENTIONALLY OMITTED]
2.7 INFORMATION BY HOLDER. Each holder of Registrable Shares included in any
registration shall furnish to the Company such information regarding such holder
and the distribution proposed by such holder as the Company may reasonably
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
3. [INTENTIONALLY OMITTED]
4. TRANSFERS OF RIGHTS. The rights and obligations of the Investor under Section
2 may be assigned by it to any person or entity that acquires at least
$2,500,000 shares of Common Stock (as adjusted in stock splits and similar
events) from the Investor. In the event of any such transfer, the transferee
must provide written notice of such assignment to the Company and agree in
writing to be bound by the applicable provisions of this Agreement.
5. GENERAL.
(a) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(b) Specific Performance. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, each Investor
shall be entitled to specific performance of the agreements and obligations of
the Company hereunder and to such other injunctive or other equitable relief as
may be granted by a court of competent jurisdiction.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts (without
reference to the conflicts of law provisions thereof).
(d) Notices. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed delivered (i) two
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient as set forth below:
If to the Company, at Engage, Inc., 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx
00000, Attention: President, or at such other address or addresses as may have
been furnished in writing by the Company to the Investor; or
If to the Investor, at CMGI, Inc., 000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000, Attention: General Counsel, or at such other address or addresses as may
have been furnished to the Company in writing by such Investor.
Any party may give any notice, request, consent or other communication under
this Agreement using any other means (including, without limitation, personal
delivery, messenger service, telecopy, first class mail or electronic mail), but
no such notice, request, consent or other communication shall be deemed to have
been duly given unless and until it is actually received by the party for whom
it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the
other parties notice in the manner set forth in this Section.
(e) Complete Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.
(f) Amendments and Waivers. Any term of this Agreement may be amended or
terminated and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Investor.
(g) Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.
(h) Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute one and the same document. This Agreement may
be executed by facsimile signatures.
(i) Section Headings. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the contractual
obligations of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date and year first above written.
CMGI, INC. ENGAGE, INC.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxxxxxx Xxxxx
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Title: Chief Financial Officer Title: President and Ceo
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