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EXHIBIT 2(A)
TO THE MERGER AGREEMENT
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "Agreement") is made and entered
into as of _____________, 1998 (the "Effective Date") by and between Xxxxxx.xxx,
Inc., a Delaware corporation ("Xxxxxx.xxx"), and the persons and entities listed
on Exhibit A hereto who have executed a counterpart signature page hereto, who
immediately prior to the effective time of the Merger (as such term is defined
below) represented holders of at least 90% of each outstanding class of capital
stock of Junglee Corp., a Delaware corporation ("Junglee") (collectively, the
"Stockholders" and each individually a "Stockholder").
RECITALS
A. Xxxxxx.xxx, Junglee, and AJ Acquisition, Inc. ("Purchaser") have
entered into an Agreement and Plan of Merger (the "Merger Agreement") dated as
of August 3, 1998, pursuant to which Purchaser will merge with and into Junglee
in a reverse triangular merger with Junglee to be the surviving corporation of
the Merger (the "Merger").
B. As a condition precedent to the consummation of the Merger, Sections
4.15 and 5.11 of the Merger Agreement provide that Xxxxxx.xxx and holders of at
least 90% of each outstanding class of capital stock of shall execute an
Investor Rights Agreement pursuant to which the Stockholders shall be granted
certain registration rights with respect to the shares of the common stock of
Xxxxxx.xxx, par value $0.01 per share (the "Xxxxxx.xxx Common Stock"), that are
issued to the Stockholders in the Merger (the "Merger Shares"), subject to the
terms and conditions set forth in this Agreement.
C. Capitalized terms used herein and not otherwise defined shall have
the meaning set forth in the Merger Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. REGISTRATION RIGHTS
1.1 DEFINITIONS
For purposes of this Section 1:
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(a) Registration. The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing with the
SEC a registration statement in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), and the declaration or ordering of effectiveness
of such registration statement by the SEC.
(b) Registrable Securities. The term "Registrable Securities"
means: (i) the Merger Shares and (ii) any shares of Xxxxxx.xxx Common Stock
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, the Merger Shares; excluding in all cases (x) any
Registrable Securities transferred by a person in a transaction in which rights
under this Section 1 are not assigned in accordance with Section 5 or (y) any
Registrable Securities sold in a public offering pursuant to a registration
statement filed with the SEC.
(c) Prospectus. The term "Prospectus" shall mean the prospectus
included in any Registration Statement filed pursuant to the provisions hereof
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement (including, without
limitation, any prospectus supplement with respect to the terms of the offering
of any portion of the Registrable Securities covered by such Registration
Statement), and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
(d) Holder. For purposes of this Agreement, the term "Holder"
means any person owning of record Registrable Securities that have not been sold
to the public pursuant to an effective registration statement or any assignee of
record of such Registrable Securities to whom rights under this Section 1 have
been duly assigned in accordance with this Agreement.
(e) SEC. The term "SEC" means the U.S. Securities and Exchange
Commission.
1.2 REGISTRATION
(a) Initial Registration. Xxxxxx.xxx shall prepare and file with
the SEC within 90 days following the Closing Date, and use its best efforts to
have declared effective as soon as practicable thereafter, a registration
statement (a "Registration Statement") providing for the resale by the Holders
of all of the Registrable Securities then owned by the Holders in accordance
with the manner of sale provisions set forth in Rule 144(f) under the Securities
Act or otherwise in customary brokerage transactions on the Nasdaq National
Market or other public market on which shares of Xxxxxx.xxx
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Common Stock are traded. Xxxxxx.xxx shall use its best efforts to keep the
Registration Statement continuously effective, pursuant to the rules,
regulations or instructions under the Securities Act applicable to the
registration statement used by Xxxxxx.xxx for such Registration Statement, for
such period (the "Effectiveness Period") ending on the earlier of the date (i)
that is one year after the date of the Closing Date, (ii) upon which all
Registrable Securities have been registered and sold pursuant to the
Registration Statement filed pursuant to this Agreement, or (iii) upon which all
of the Registrable Securities originally issued pursuant to the Merger Agreement
cease to meet the definition of Registrable Securities pursuant to Section
1.1(b).
(b) Notice and Approval. If one or more Holders shall propose to
sell Registrable Securities pursuant to the Registration Statement, such Holder
or Holders shall deliver to Xxxxxx.xxx at least three full trading days prior to
such proposed sale a written notice (a "Stockholder Sale Notice") notifying
Xxxxxx.xxx of their intent to sell (including the proposed manner and timing of
all sales), and the provision of such notice to Xxxxxx.xxx shall conclusively be
deemed to establish and confirm an agreement by such Holder or Holders to sell
such Registrable Securities, in whole, in part or not at all (without the
necessity to provide a new Stockholder Sale Notice to Xxxxxx.xxx), within a
period ending on the tenth trading day following the first such sale and to
comply with the other registration provisions set forth in this Agreement.
Unless otherwise specified in the Stockholder Sale Notice, such Stockholder Sale
Notice shall be deemed to constitute a representation that any information
previously supplied to such Holder expressly for inclusion in the Registration
Statement (as the same may have been superseded by subsequent such information)
is accurate as of the date of such Stockholder Sale Notice. At any time within
such three trading day period, Xxxxxx.xxx may exercise its rights under Section
1.2(c) hereof. To the extent Xxxxxx.xxx shall not exercise its rights pursuant
to Section 1.2(c) hereof, Xxxxxx.xxx shall provide written notice to each of the
other Holders regarding the availability of such ten trading day period;
provided, however, that if any such Holder does not receive such written notice
within three trading days of the Stockholder Sale Notice, such Holder may sell
his, her or its Registrable Securities pursuant to the terms hereof.
(c) Right of Suspension. Notwithstanding any other provision of
this Section 1.2, Xxxxxx.xxx shall have the right at any time to prohibit or
suspend offers and sales of Registrable Securities whenever, and for so long as,
in the reasonable judgment of Xxxxxx.xxx after consultation with counsel (i)
there exists a material development or a potential material development with
respect to or involving Xxxxxx.xxx that Xxxxxx.xxx would be obligated to
disclose in the Prospectus contained in the Registration Statement, which
disclosure would in the good faith judgment of Xxxxxx.xxx be premature or
otherwise inadvisable at such time and would have a material adverse effect upon
Xxxxxx.xxx and its stockholders, or (ii) an event has occurred that makes any
statement made in the Registration Statement or related
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Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in the Registration Statement or Prospectus so that it will not contain
any untrue statement of a material fact required to be stated therein or
necessary to make the statements therein not misleading or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. To effect such suspension or prohibition, Xxxxxx.xxx shall deliver a
certificate in writing to the Holders and, upon receipt of such certificate, the
use of the Registration Statement and Prospectus will be deferred or suspended
and will not recommence until (x) such Holders' receipt from Xxxxxx.xxx of
copies of the supplemented or amended Prospectus or (y) such Holders are advised
in writing by Xxxxxx.xxx that the Prospectus may be used. Xxxxxx.xxx will use
its best efforts to ensure that the use of the Registration Statement and
Prospectus may be resumed as soon as practicable and, in the case of a pending
development referred to in (i) above, as soon as, in the judgment of Xxxxxx.xxx,
disclosure of the material information relating to such pending development
would not have a materially adverse effect on Xxxxxx.xxx's ability to consummate
the transaction, if any, to which such development relates. Notwithstanding the
foregoing, Xxxxxx.xxx will use reasonable efforts to ensure that in any event
the Holders shall have ten trading days (prorated for partial fiscal quarters)
available to sell Registrable Securities during each fiscal quarter (or portion
thereof) during the Effectiveness Period.
(d) Expenses. All reasonable expenses, other than broker's
commissions and similar charges, and legal fees and disbursements of counsel for
the selling Holders, incurred in connection with the Registration Statement
shall be borne by Xxxxxx.xxx.
1.3 OBLIGATIONS OF XXXXXX.XXX
Whenever required to effect the registration of any Registrable
Securities under this Agreement, Xxxxxx.xxx shall, as expeditiously as
reasonably possible:
(a) Prepare promptly and file with the SEC the Registration
Statement as provided in Section 1.2(a), which Registration Statement (including
any amendments or supplements thereto and Prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, and cause
such Registration Statement to become effective as soon as practicable.
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(b) Prepare promptly and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
with such Registration Statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement.
(c) Furnish to Holders such number of copies of a Prospectus,
including a preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents as reasonably requested in order to
facilitate the disposition of the Registrable Securities owned by it that are
included in such registration.
(d) Use its best efforts to register and qualify the securities
covered by such Registration Statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by Holders;
provided, however, that Xxxxxx.xxx shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) Notify Holders promptly (i) of any request by the SEC or any
other federal or state governmental authority during the Effectiveness Period of
the Registration Statement for amendments or supplements to such Registration
Statement or related Prospectus or for additional information, (ii) of the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (iii) of the receipt by
Xxxxxx.xxx of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (iv) of the happening of any event which makes any
statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the Registration
Statement or Prospectus so that it will not contain any untrue statement of a
material fact required to be stated therein or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and (v) of
Xxxxxx.xxx's determination that a post-effective amendment to the Registration
Statement would be appropriate.
1.4 INFORMATION TO BE FURNISHED
It shall be a condition precedent to the obligations of
Xxxxxx.xxx to take any action pursuant to Section 1.2 that each Holder shall
furnish to Xxxxxx.xxx such information regarding Holder, the Registrable
Securities held by Holder, and the intended
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method of disposition of such securities as shall be required to timely effect
the registration of Holder's Registrable Securities.
1.5 INDEMNIFICATION
(a) By Xxxxxx.xxx. To the extent permitted by law and subject
to Section 1.5(d), Xxxxxx.xxx will indemnify and hold harmless each of the
Holders, officers, directors, employees and agents of a Holder or underwriters
(as defined in the Securities Act) and each person, if any, who controls a
Holder within the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), against any losses, claims, damages or
liabilities (joint or several) to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, including any
preliminary Prospectus or final Prospectus contained therein or in any
amendments or supplements thereto;
(ii) the omission or alleged omission to state in the
Registration Statement, including any preliminary Prospectus or final Prospectus
contained therein or in any amendments or supplements thereto, a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; or
(iii) any violation or alleged violation by Xxxxxx.xxx
of the Securities Act, the Exchange Act, any federal or state securities law or
any rule or regulation promulgated under the Securities Act, the Exchange Act or
any federal or state securities law in connection with the offering covered by
such Registration Statement.
Xxxxxx.xxx will reimburse each Holder, such officer, director, employee or
agent, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 1.5(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Xxxxxx.xxx (which consent shall
not be unreasonably withheld), nor shall Xxxxxx.xxx 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 a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with
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such registration by Holder, or by such officer, director, employee, agent,
underwriter or controlling person of Holder.
(b) By Holders. To the extent permitted by law and subject to
Section 1.5(d), each Holder will indemnify and hold harmless Xxxxxx.xxx, each of
its directors, each of its officers who have signed the Registration Statement,
each person, if any, who controls Xxxxxx.xxx within the meaning of the
Securities Act, any other employee or agent of Xxxxxx.xxx, each other Holder,
each person, if any, who controls such Holder within the meaning of the
Securities Act, and any other employee or agent of such Holder against any
losses, claims, damages or liabilities (joint or several) to which Xxxxxx.xxx or
any such director, officer or controlling person, employee or agent may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and such Holder will reimburse any
legal or other expenses reasonably incurred by Xxxxxx.xxx or any such director,
officer or controlling person, employee or agent in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 1.5(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
Holder, which consent shall not be unreasonably withheld; and provided, further,
that the total amounts payable in indemnity by any Holder under this Section
1.5(b) in respect of any Violation shall not exceed the net proceeds received by
such Holder in the registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under
this Section 1.5 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against any indemnifying party
under this Section 1.5, deliver to the indemnifying party a written notice of
the commencement of such an action, and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action,
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shall (to the extent of such prejudice) relieve such indemnifying party of any
liability to the indemnified party under this Section 1.5, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 1.5.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of Xxxxxx.xxx and the Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary Prospectus
but eliminated or remedied in the amended Prospectus on file with the SEC at the
time the registration statement in question becomes effective or in the amended
Prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final
Prospectus"), such indemnity agreements shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished to the indemnified party
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 Securities Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder (and/or any officer, director, employee, agent,
underwriter or controlling person who may be indemnified under Section 1.5(a))
makes a claim for indemnification pursuant to this Section 1.5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such
case, notwithstanding the fact that this Section 1.5 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of such Holder (and/or any officer, director, employee,
agent, underwriter or controlling person who may be indemnified under Section
1.5 (a)) in circumstances for which indemnification is provided under this
Section 1.5; then, and in each such case, Xxxxxx.xxx and such Holder (and/or
such other person) will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
proportion to their relative fault as determined by a court of competent
jurisdiction; provided, however, that in no event, except in instances of fraud
by Holder in which case there is no limitation, (x) shall any Holder be
responsible for more than the portion represented by the percentage that the
public offering price of its Registrable Securities offered by and sold under
the Registration Statement bears to the public offering price of all securities
offered by and sold under such Registration Statement or (y) shall a Holder be
required to contribute any amount in excess of the public offering price of all
such securities offered and sold by such Holder pursuant to such Registration
Statement; and in any event, no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
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(f) Survival. The obligations of Xxxxxx.xxx and such Holder under
this Section 1.5 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
2. OBLIGATIONS OF THE STOCKHOLDERS
2.1 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder represents with respect to himself, herself or
itself that:
(a) Good Title. (i) Such Stockholder owns, beneficially and of
record, the shares of capital stock of Junglee listed opposite such
Stockholder's name on Exhibit A hereto, (ii) such shares of capital stock of
Junglee are free and clear of any lien, encumbrance, adverse claim, mortgage,
pledge, deed of trust, security interest, charge, restriction on sale or
transfer (other than restrictions imposed by applicable securities laws or by
any contract with Junglee), preemptive right, option or other adverse claim or
interest of any kind, (iii) such Stockholder has all necessary power, right and
authority to enter into this Agreement and each of the agreements, certificates,
instruments and documents executed or delivered pursuant to the terms of the
Merger Agreement by such Stockholder and to consummate the transactions
contemplated hereby and thereby, and (iv) this Agreement has been duly
authorized, executed and delivered by such Stockholder and is a legal, valid and
binding obligation of such Stockholder, enforceable in accordance with its
terms.
(b) Ability to Bear Risk. Such Stockholder is in a financial
position to hold the Xxxxxx.xxx Common Stock for an indefinite period of time
and is able to bear the economic risk and withstand a complete loss of his, her
or its investment in the Xxxxxx.xxx Common Stock.
(c) SEC Documents. Such Stockholder acknowledges that he, she or
it has received and had the opportunity to review to such Stockholder's
satisfaction the materials disseminated by Junglee in connection with the
written consent or special meeting of Stockholders to approve the Merger and the
transactions contemplated thereby, including those filings and reports of
Xxxxxx.xxx filed with the SEC since the completion of Xxxxxx.xxx's most recent
fiscal year, consisting of Xxxxxx.xxx's Annual Report on Form 10-K for the
fiscal year ending December 31, 1997 (the "Form 10-K"), its Quarterly Report on
Form 10-Q for the fiscal quarter ending March 31, 1998, all Form 8-Ks filed
after the date of the Form 10-K, and its Proxy Statement relating to its 1998
Annual Meeting of Stockholders on May 28, 1998.
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(d) Professional Advice. Such Stockholder has obtained, to the
extent that he, she or it deems necessary, professional advice with respect to
the risks inherent in acquiring the Xxxxxx.xxx Common Stock, the financial
condition of Xxxxxx.xxx and the suitability of an investment in the Xxxxxx.xxx
Common Stock in light of such Stockholder's financial condition and investment
needs.
(e) Sophistication. Such Stockholder, either alone or with the
assistance of his, her or its professional advisors, is a sophisticated
investor, is able to fend for himself, herself or itself in the transactions
contemplated by this Agreement relating to the Xxxxxx.xxx Common Stock and has
such knowledge and experience in financial and business matters that he, she or
it is capable of evaluating the merits and risks of the prospective investment
in the Xxxxxx.xxx Common Stock.
(f) Accredited Investor. Except as set forth on Schedule A
hereto, such Stockholder is an "accredited investor" as defined in Rule 501(a)
of Regulation D under the Securities Act (an "Accredited Investor").
(g) Investment for Own Account. The Xxxxxx.xxx Common Stock is
being acquired by such Stockholder for investment for his, her or its respective
account, not as a nominee or agent, and not with a view to the distribution of
any part thereof; such Stockholder has no present intention of selling, granting
any participation in or otherwise distributing any of the Xxxxxx.xxx Common
Stock in a manner contrary to the Securities Act or to any applicable state
securities or Blue Sky law, nor does Stockholder have any contract, undertaking,
agreement or arrangement with any person or entity to sell, transfer or grant a
participation to such person or entity with respect to any of the Xxxxxx.xxx
Common Stock.
(h) Restricted Securities. Such Stockholder acknowledges that the
Xxxxxx.xxx Common Stock has not been and will not prior to issuance be
registered under the Securities Act and that the Xxxxxx.xxx Common Stock is
characterized under the Securities Act as "restricted securities" and,
therefore, cannot be sold or transferred until such sale or transfer is
registered under the Securities Act as provided in this Agreement or an
exemption from such registration is available.
(i) Exemption Reliance. Such Stockholder has been advised that
the Xxxxxx.xxx Common Stock is being issued under this Agreement pursuant to
exemptions from applicable federal and state securities laws, and that
Xxxxxx.xxx's reliance on such exemptions is predicated in part on such
Stockholder's representations contained herein.
(j) Residence. For purposes of the application of state
securities laws, each Stockholder is a resident of the state as set forth on the
signature page hereto.
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(k) Legend. Each holder understands that, prior to the
effectiveness of the Registration Statement, certificates or other instruments
representing any of the Registrable Securities acquired by Holder will bear
legends substantially similar to the following, in addition to any other legends
required by federal or state laws:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE
SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT COVERING ANY SUCH TRANSACTION INVOLVING
SAID SECURITIES, (ii) THIS CORPORATION RECEIVES AN OPINION OF
LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO
THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION, OR (iii) THIS CORPORATION OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.
Each holder agrees that, in order to ensure and enforce compliance with the
restrictions imposed by applicable law and those referred to in the foregoing
legends, or elsewhere herein, Xxxxxx.xxx may, prior to the effectiveness of the
Registration Statement, issue appropriate "stop transfer" instructions to its
transfer agent, if any, with respect to any certificate or other instrument
representing Registrable Securities, or if Xxxxxx.xxx transfers its own
securities, that it may make appropriate notations to the same effect in
Xxxxxx.xxx's records.
2.2 INVESTOR QUESTIONNAIRE
Each Stockholder who is not an Accredited Investor shall complete
and execute an Investor Questionnaire in the form attached hereto as Exhibit B.
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3. STOCKHOLDER REPRESENTATIVE
(a) Each undersigned Stockholder hereby irrevocably authorizes
and appoints Xxxxxx Xxxxxx (the "Stockholder Representative"), with full power
of substitution and resubstitution, as his, her or its representative and true
and lawful attorney-in-fact and agent to act in his, her or its name, place and
stead and to execute in the name and on behalf of such Stockholder the Escrow
Agreement, dated as of the date hereof, between Xxxxxx.xxx, the Stockholder
Representative and ChaseMellon Shareholder Services L.L.C. (the "Escrow
Agreement") and any other agreement, certificate, instrument or document to be
delivered by the Stockholders in connection with the Escrow Agreement.
(b) Each of the undersigned Stockholders agrees that the
Stockholder Representative shall have the full power, authority and right to
perform, do and take any and all actions and the making of any decisions that
are required or permitted to be taken by him under the Escrow Agreement all
without liability to such Stockholder (except as expressly stated herein or
therein), so long as the same are carried out by the Stockholder Representative
in good faith and the Stockholders are treated, in all material respects, in the
same manner (taking into account their relative pro rata interests). Such
actions include the power to amend, modify or waive any provision of the Escrow
Agreement in the name of each Stockholder as if such Stockholder had himself,
herself or itself amended, modified or waived such provision of the Escrow
Agreement. In particular, but not by way of limitation, the Stockholder
Representative shall have the power to make decisions, carry out decisions and
settle claims under the Escrow Agreement on behalf of each Stockholder and to
sign documents and make filings on behalf of each Stockholder in connection
therewith as if such Stockholder had himself, herself or itself signed or filed
such document.
(c) Each Stockholder understands that this appointment is
irrevocable.
(d) Each Stockholder agrees to pay a pro rata portion of the
reasonable costs and expenses of such Stockholder Representative in connection
with this Agreement.
(e) The Stockholder Representative may resign at any time. Upon
such resignation, each Stockholder hereby authorizes the Stockholder
Representative to appoint a new Stockholder Representative to replace such
resigning Stockholder Representative with the same powers and duties as such
resigning Stockholder Representative; provided, however, that such newly
appointed Stockholder Representative shall have been a member of the Board of
Directors of Junglee immediately prior to the Closing Date and, if the Survival
Period (as defined in the
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Escrow Agreement) has not yet expired, the Escrow Agent shall be notified of
such appointment forthwith.
(f) If the Stockholder Representative or any successor shall die,
or become unable to act as the Stockholder Representative, a replacement shall
promptly be appointed by a writing signed by the Stockholders who initially
received a majority of the Merger Consideration; provided, however, that such
newly appointed Stockholder Representative shall have been a member of the Board
of Directors of Junglee immediately prior to the Closing Date and, if the
Survival Period has not yet expired, the Escrow Agent shall be notified of such
appointment forthwith.
(g) Unless and until Xxxxxx.xxx, and if the Survival Period has
not yet expired, the Escrow Agent, shall have received written notice of the
appointment of a successor Stockholder Representative for the Stockholders,
Xxxxxx.xxx and the Escrow Agent shall be entitled to rely on, and shall be fully
protected in relying on, the power and authority of the Stockholder
Representative to act on behalf of the Stockholders.
4. ESTABLISHMENT AND ENFORCEMENT OF INDEMNIFICATION OBLIGATION
Each Stockholder, by his, her or its signature below, represents
that he, she or it has read Article VIII of the Merger Agreement as well as
Section 1.5 of this Agreement with respect to the indemnification rights and
obligations of the Stockholders stated therein and herein and agrees for the
benefit of Junglee and the surviving corporation pursuant to the Merger
Agreement to abide by such provisions (as well as those with respect to specific
performance).
5. ASSIGNMENT
Notwithstanding anything herein to the contrary, the registration
rights of a Holder under Section 1 hereof may be assigned only to a party who
acquires from Holder at least 50,000 shares of Xxxxxx.xxx Common Stock that
constitute the original number of Registrable Securities (as such number may be
adjusted to reflect subdivisions, combinations and stock dividends of Xxxxxx.xxx
Common Stock) or as a distribution made by a Holder which is a partnership to
the limited partners of such Holder of Registrable Securities; provided,
however, that no party may be assigned any of the foregoing rights until
Xxxxxx.xxx is given written notice by the assigning party at the time of such
assignment stating the name and address of the assignee and identifying the
securities of Xxxxxx.xxx as to which the rights in question are being assigned;
provided, further, that any such assignee shall receive such assigned rights
subject to all the terms and conditions of this Agreement, including without
limitation the provisions of this Section 5.
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6. GENERAL PROVISIONS
6.1 NOTICES
Any notice or demand desired or required to be given hereunder
shall be in writing given by personal delivery, certified or registered mail,
confirmed facsimile transmission, or overnight courier service, in each case
addressed as respectively set forth below or to such other address as any party
shall have previously designated by such a notice. The effective date of any
notice or request shall be the date of personal delivery, four days after the
date of mailing by certified or registered mail, the date on which successful
facsimile transmission is confirmed, or the date undertaken for delivery by a
reputable overnight courier service, as the case may be, in each case properly
addressed as provided herein and with all charges prepaid.
If to Xxxxxx.xxx :
Xxxxxx.xxx, Inc.
Fourth Floor
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Treasurer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to the Stockholders:
At their respective addresses set forth on the signature
pages attached hereto.
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
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6.2 SEVERABILITY
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the fullest extent possible.
6.3 ENTIRE AGREEMENT
This Agreement, the Merger Agreement and each of the agreements,
certificates, instruments and documents to be executed or delivered pursuant to
the terms of the Merger Agreement constitute the entire agreement among the
parties with respect to the subject matter hereof and thereof and supersede all
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof and thereof.
6.4 SUCCESSORS AND ASSIGNS
Subject to the provisions of Section 5, the provisions of this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and permitted assigns of the parties hereto.
6.5 GOVERNING LAW
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in that State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any Delaware state
or federal court thereof.
6.6 THIRD PARTIES
This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
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6.7 HEADINGS
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.8 COUNTERPARTS
This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed and
delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. To expedite the process of entering
into this Agreement, the parties acknowledge that Transmitted Copies of this
Agreement will be equivalent to original documents until such time as original
documents are completely executed and delivered. "Transmitted Copies" will mean
copies that are reproduced or transmitted via photocopy, facsimile or other
process of complete and accurate reproduction and transmission. This Agreement
shall be deemed effective when signed by Xxxxxx.xxx, the Stockholder
Representative and the Stockholders holding at least 90% of each outstanding
class of capital stock of Junglee.
6.9 ABANDONMENT OF MERGER
In the event that the Merger Agreement is terminated and the
Merger abandoned pursuant to Article VII of the Merger Agreement, no party
hereto not in breach of its obligations hereunder shall have any liability to
any other party, including, but not limited to, liability for expenses incurred
by any such other party in connection with this Agreement.
6.10 AMENDMENT OF RIGHTS
Subject to the following sentence, this Agreement may not be
amended except by an instrument signed by Xxxxxx.xxx and the Stockholder
Representative and each undersigned Stockholder hereby grants expressly to the
Stockholder Representative the authority and discretion, so long as such
authority and discretion are exercised in good faith, to enter into such
amendments as he chooses in the exercise of such authority and discretion.
Notwithstanding the fact that the Effective Time of the Merger may have
occurred, those holders of capital stock of Junglee that prior to such time were
entitled or required to but did not execute or deliver this Agreement may so do
(and shall automatically become a party to this Agreement without the need for
any act of any other party hereto) without requirement for amendment hereunder
and without jeopardizing the rights of any party hereto.
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6.11 SPECIFIC PERFORMANCE
Each of the parties acknowledges and agrees that the other
parties hereto would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the parties hereto agrees the other
parties hereto will be entitled to an injunction to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions of this Agreement (including the indemnification provisions
hereof) in any competent court having jurisdiction over the parties, in addition
to any other remedy to which they might be entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have entered into and
signed this Agreement as of the date and year first above written.
XXXXXX.XXX, INC.
By:
----------------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
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SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT
STOCKHOLDER
By:
-------------------------------------
Name:
--------------------------------
Address:
-----------------------------
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-------------------------------------
Number of Shares:
--------------------
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