Exhibit 4.02
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of November 24, 1998 by and among xxxxxxxx.xxx LLC, a Delaware limited
liability company (the "Company") and Internet World Media, Inc., a Delaware
corporation ("Internet World").
1. Definitions.
As used in this Agreement:
1.1 "Act" shall mean the Securities Act of 1933, as amended, or any
successor statute thereto;
1.2 "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Act;
1.3 "Eligible Transferee" shall mean any Person to which Internet World
has transferred Registrable Securities in compliance with all restrictions on
transfer contained in the LLC Agreement;
1.4 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute thereto;
1.5 "Holder" shall mean Internet World or any Eligible Transferee;
1.6 "Initial Public Offering" shall mean the underwritten initial primary
public offering of the Company's Units pursuant to a registration under the Act;
1.7 "Initiating Holder" shall mean any Holder or Holders who in the
aggregate are Holders of more than 50% of the then outstanding Registrable
Securities;
1.8 "LLC Agreement" shall mean the Amended and Restated Limited Liability
Company Agreement of xxxxxxxx.xxx LLC, dated as of the date hereof, by and among
the Company, Internet World, and Xxxx X. Xxxxxxx (and/or one or more of his
affiliates);
1.9 "Other Holder" shall mean any Member of the Company, other than any
Holder, who has requested or is entitled, by contract with the Company or
otherwise, to have securities included in a registration by the Company which is
subject to Section 2 hereof;
1.10 "Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof;
1.11 "Unit" means a Unit representing a membership interest in the Company
and any equity security into which such Unit may be converted by the Company
(whether by merger, pursuant to a transaction described in Section 6 hereof, or
otherwise);
1.12 the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act (and any post-effective amendments filed or required to
be filed) and the declaration or ordering of effectiveness of such registration
statement;
1.13 "Registrable Securities" means (A) Units held by Internet World
pursuant to the LLC Agreement, (B) any additional Units acquired by Internet
World and (C) any equity securities of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, the Units
referred to in clause (A) or (B) above;
1.14 "Registration Expenses" shall mean all expenses incurred by the
Company in connection with any registration by the Company which is subject to
Section 2 hereof, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company,
listing fees, blue sky fees and expenses and the expense of any special audits
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); and
1.15 "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders in connection with such sale.
2. Company Registration.
2.1 If the Company shall determine to register any of its equity
securities either for its own account or for the account of a security holder or
holders exercising their respective demand registration rights, if any, other
than an Initial Public Offering of the Units, a registration relating solely to
employee benefit plans, or a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does not
permit secondary sales or does not include substantially the same information as
would be required to be
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included in a registration statement covering the sale of Registrable
Securities, the Company will:
(a) promptly give to each of the Holders a written notice thereof (which
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); and
(b) include in such registration (and any related qualification under blue
sky laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests,
made by the Holders within fifteen (15) days after receipt of the written
notice from the Company described in clause (i) above, except as set forth
in Section 2.2 below. Such written request may specify all or a part of
the Holders' Registrable Securities.
2.2 Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise each of the Holders as a part of the written notice given pursuant to
Section 2.1(a). In such event, the right of each of the Holders to registration
pursuant to this Section 2 shall be conditioned upon such Holders' participation
in such underwriting and the inclusion of such Holders' Registrable Securities
in the underwriting to the extent provided herein. Each Holder whose Registrable
Securities are to be included in such registration shall (together with the
Company and the Other Holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for underwriting by
the Company. Notwithstanding any other provision of this Section 2, if the
representative determines that marketing factors require a limitation on the
number of securities to be underwritten, the representative may (subject to the
allocation priority set forth below) limit the number of Registrable Securities
to be included in the registration and underwriting to not less than twenty five
percent (25%) of the securities included therein (based on aggregate market
values). The Company shall so advise all holders of securities requesting
registration, and the number of securities 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 Other Holders of the Company (other than
Registrable Securities and other than securities held by holders who by
contractual right demanded such registration ("Demanding Holders")) shall be
excluded from such registration and underwriting to the extent required by such
limitation, and, if a
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limitation on the number of securities is still required, the number of
securities that may be included in the registration and underwriting by each of
the Holders and Demanding Holders shall be reduced, on a pro rata basis (based
on the number of securities held by such Holder), by such minimum number of
securities as is necessary to comply with such limitation. If any of the Holders
or any officer, director or Other Holder 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.
2.3 Number and Transferability. Each of the Holders shall be entitled to
have its Registrable Securities included in an unlimited number of registrations
pursuant to this Section 2 until such time as it shall no longer hold any
Registrable Securities. The registration rights granted pursuant to this Section
2 shall be assignable, in whole or in part, to any Eligible Transferee of the
Registrable Securities (who shall be bound by all obligations of this Section
2).
3. 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 pro rata on the basis of the number of
their securities so registered.
4. Registration Procedures. In the case of each registration effected by the
Company pursuant to this Agreement, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
4.1 keep such registration effective for a period of one hundred twenty
(120) days or until the Holders, as applicable, have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that in the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 120-day period shall be extended until all such Registrable
Securities are sold, provided that Rule 415, or any successor rule under the
Act, permits an offering on a continuous or delayed basis, and provided further
that applicable rules under the Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
which (y) includes any prospectus required by Section 10(a) of the Act or (z)
reflects facts or events representing a material or fundamental change in the
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information set forth in the registration statement, the incorporation by
reference of information required to be included in (y) and (z) above to be
contained in periodic reports filed pursuant to Section 12 or 15(d) of the
Exchange Act in the registration statement; and
4.2 furnish such number of prospectuses and other documents incident
thereto as each of the Holders, as applicable, from time to time may reasonably
request.
5. Indemnification.
5.1 The Company will indemnify each of the Holders, each of its officers,
directors and partners, and each person controlling each of the Holders, as
applicable, with respect to each registration which has been effected pursuant
to this Agreement, and each underwriter, if any, and each person who controls
any underwriter, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of its
officers, directors and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action; provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by the Holders or underwriter and stated to
be specifically for use therein.
5.2 Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Act and the rules and regulations
thereunder, each Other Holder and each of
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their officers, directors, and partners, and each person controlling such Other
Holder against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Company and such Other Holders,
directors, officers, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder shall be limited to an amount equal
to the net proceeds to such Holder of securities sold as contemplated herein.
5.3 Each party entitled to indemnification under this Section 5 (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 any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
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 5 unless the Indemnifying Party is materially prejudiced
thereby. 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 to
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such claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.
5.4 If the indemnification provided for in this Section 5 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
5.5 Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering contemplated by this
Agreement are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
5.6 The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter if a copy of the Final Prospectus was furnished to the underwriter
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Act.
6. Certain Reorganizations. Notwithstanding any other provision contained
herein, in the event that the Company transfers substantially all of its assets
to another entity,
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receiving common stock or other equity interests in such entity in return, and
then makes a liquidating distribution of such common stock or other equity
interest to holders of Units, such common stock or other equity interest shall
be deemed to be Units for purposes of this Agreement, and all rights and
obligations contained in this Agreement shall apply thereto.
7. Additional Registration Rights. Notwithstanding any other provision contained
herein, the Company shall not, without the prior written consent of the Holder,
grant to any Member registration rights more favorable than those granted to the
Holder pursuant to this Agreement.
8. Information by the Holders. Each of the Holders, and each Other Holder
holding securities included in any registration, shall furnish to the Company
such information regarding itself and the distribution proposed by it 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.
9. Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
9.1 make and keep public information available as those terms are
understood and defined in Rule 144, at all times from and after ninety (90) days
following the effective date of the first registration under the Act filed by
the Company for an offering of its securities to the general public;
9.2 use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Act and the
Exchange Act at any time after it has become subject to such reporting
requirements; and
9.3 so long as the Holder owns any Registrable Securities, furnish to the
Holder upon request a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 (at any time from and after ninety (90)
days following the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as the Holder may
reasonably request in availing itself of
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any rule or regulation of the Commission allowing the Holder to sell any such
securities without registration.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
XXXXXXXX.XXX LLC
By: /s/ XXXX X. XXXXXXX
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Member
INTERNET WORLD MEDIA, INC.
By: /s/ XXXXXX XxXXXXXX
---------------------------------
Name: Xxxxxx XxXxxxxx
Title: Chief Financial Officer
