1
EXHIBIT 10.10.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of July __,
1999 by and among CommTouch Software Ltd., an Israeli company (the "Company"),
and Go2Net, Inc., a Delaware corporation ("Go2Net"), and Vulcan Ventures
Incorporated, a Washington corporation (together with Go2Net, the "Holders").
RECITALS
A. The Holders and the Company are parties to the Share Purchase
Agreement dated as of the date hereof (the "Share Purchase Agreement"), pursuant
to which the Holders have acquired in the aggregate _______ shares of the
Company's Ordinary Shares, with a nominal value NIS 0.05 (the "Purchased
Shares").
B. The Company has granted Go2Net a warrant (the "Warrant") to purchase
1,136,000 shares of the Company's Ordinary Shares at a per share price of
$12.80, as may be adjusted pursuant to the terms of the Warrant (the "Warrant
Shares").
C. The Company desires to grant, and the Holders desire to be granted,
the registration rights created herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. Certain Definitions. All capitalized terms used and not otherwise
defined herein shall have the meanings given them in the Stock Purchase
Agreement. As used in this Agreement, the following terms shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Registrable Securities" means any of (i) Purchased Shares, (ii) the
Warrant Shares and (iii) any other securities issued or issuable with respect to
the Purchased Shares or the Warrant Shares by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as otherwise
stated below, incurred by the Company in complying with Section 2.1 hereof,
including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, blue sky fees and expenses, stock transfer taxes
2
applicable to the securities registered by the Holders, all fees and
disbursements of one (1) counsel for the Holders, 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).
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions.
2. Registration
2.1 Registration of Registrable Securities. The Company shall use its
best efforts to file with the Commission a registration statement on Form F-1
(or any successor form to F-1) for a public resale offering by the Holders of
the Registrable Shares (including, without limitation, with respect to Go2Net,
the Warrant Shares) and the Warrant as soon as practicable, but in no event
later than 180 days from the date hereof, and shall cause such registration
statement to become and remain effective for the period ending on the first to
occur of (i) the date the resale of all of the Registrable Shares registered
thereunder is complete and the full exercise of the Warrant or (ii) two (2)
years from the date hereof. Any registration pursuant to this Section 2.1 may be
firmly underwritten by an underwriter of national recognition which shall be
selected by the Holders and be reasonably satisfactory to the Company. The
Company shall promptly prepare and file with the Commission such amendments to
the registration statement as may be necessary to keep such registration
statement effective for a period of two (2) years, or as is necessary to reflect
any transfer of the Warrant and/or the Warrant Shares by Go2Net, pursuant to the
terms and conditions of the Warrant. In the event that the Company fails to
register the Registrable Shares and the Warrant in accordance with the
foregoing, then the Warrant Price (as such term is defined in the Warrant) shall
be decreased from $12.80 to $10.51.
2.2 Expenses of Registration. All Registration Expenses incurred in
connection with registrations pursuant to Section 2.1 shall be borne by the
Company. Selling Expenses shall be borne by the Holders on a pro rata basis
based upon the number of Registrable Shares registered on such registration
statement.
2.3 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. The Company will:
(a) Prepare and furnish to each Holder and to the underwriters
(if any) of the securities being registered such reasonable number of copies of
the registration statement,
3
preliminary prospectus, final prospectus (any supplements or revisions thereto
required under the Securities Act) and such other documents as the Holders and
underwriters may reasonably request in order to facilitate the public offering
of such securities and make the Company's representatives and the Company's
counsel available for discussion of such document and make such changes in such
document relating to the Holders prior to the filing thereof as such Holders,
counsel for such Holders, or underwriters may reasonably request.
(c) 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 the Holders,
provided that the Company 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.
(d) Notify the Holders at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, 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 the circumstances
then existing; and to promptly prepare and file all amendments or supplements
and related revised prospectuses as shall be required under the Securities Act
as a result of such untrue statements or omissions.
(e) Use its best efforts to comply with all applicable federal
and state securities laws (including without limitation the rules and
regulations of the Commission), and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act no later than forty-five (45) days after the end of a twelve (12)
month period after the Closing Date (or within ninety (90) days after the end of
a fiscal year).
(f) At the request of any Holder, use its best efforts to
furnish on the date that the Registrable Shares are delivered to any underwriter
for sale in connection with a registration pursuant to this Agreement (i) an
opinion of the counsel representing the Company for the purposes of such
registration, and (ii) a letter from the independent certified public
accountants of the Company, each dated such date and in form and substance as is
customarily given by counsel and independent certified public accountants to
underwriters in an underwritten public offering, addressed to any Holders'
underwriter and to the Holders.
2.4 Indemnification.
(a) With respect to any registration of Registrable Shares and,
with respect to Go2Net, the Warrant, the Company will indemnify the Holders,
their officers and directors and partners, and each person controlling the
Holders within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or
4
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, 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 Securities Act of 1933, the Securities Exchange Act of 1934,
state securities law or any rule or regulation promulgated under such laws
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each Holder, each of
their officers, directors and partners, and each person controlling the Holder,
each such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred, as such expenses are incurred,
in connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, whether or not resulting in any liability, 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 or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by the Holders, controlling person or
underwriter and stated to be specifically for use therein; provided, however,
that the foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any such untrue statement, alleged untrue statement, omission
or alleged omission made in a preliminary prospectus, such indemnity agreement
shall not inure to the benefit of any underwriter, or the Holders, if there is
no underwriter, if a copy of the final prospectus filed with the Commission
pursuant to its Rule 424(b) 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, and if such final prospectus cured the untrue statement,
alleged untrue statement, omission or alleged omission giving rise to the loss,
liability, claim or damage.
(b) With respect to any registration of Registrable Shares and
the Warrant, each Holder will indemnify, severally and not jointly, the Company,
each of its directors and officers, each underwriter, if any, of the Company's
securities covered by such registration statement, and each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act against all expenses, 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, or 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, and will reimburse
the Company, such directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred, as such
expenses are incurred, in connection with investigating, preparing 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 an instrument
duly executed by a Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of a Holder under this Section
2.4(b) shall be limited to and in proportion to an amount equal to the net
proceeds received by such Holder from the sale of the Registrable Shares sold by
5
such Holder pursuant to such registration statement. In no event will a Holder
be required to enter into any agreement or undertaking for the benefit of the
Company in connection with any registration under this Agreement providing for
any indemnification or contribution obligations on the part of the Holder
greater than the Holder's obligations under this Section 2.4 (b).
(c) Each party entitled to indemnification under this Section
2.4 (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 be unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, 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 Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action,
and provided further that the Indemnifying Party shall not assume the defense
for matters as to which representation of both the Indemnifying Party and the
Indemnified Party by the same counsel would be inappropriate due to actual or
potential differing interests between them, but shall instead in such event pay
the fees and costs of separate counsel for the Indemnified Party. 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 such claim or litigation. No
Indemnified Party shall be entitled to indemnification from any Indemnifying
Party for any amounts paid in any settlement effected without the consent of the
Indemnifying Party.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Party or any officer, director or controlling person
of such Indemnified Person.
2.5 Information by Holder. If a Holder's Registrable Securities are
included in any registration under this Agreement, the Holder shall furnish to
the Company such information regarding the Holder, the Registrable Securities
held by it and the distribution proposed by it as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
2.6 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Shares to the public without registration, assuming
that a public market exists for the Ordinary Shares of the Company, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act during the term
of this Agreement;
(b) File with the Commission in a timely manner all reports and
other
6
documents required of the Company under the Securities Act and the Securities
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as the Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Securities Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such securities
without registration.
2.7 Transfer of Registration Rights. The rights to cause the Company
to register securities granted the Holder under Sections 2.1 may be assigned or
transferred to a transferee of any of the Registrable Securities.
3. Termination. The rights of a Holder under Section 2.1 of this
Agreement shall terminate as to the Holder at such time as such Holder can sell
all of its Registrable Securities pursuant to Rule 144(k) promulgated under the
Securities Act.
4. Pari Passu Rights. While this Agreement is in effect, the Company
shall be prohibited from granting any registration rights to any other party
which rank superior to or pari passu with those granted to the Holders
hereunder; provided that this Section 4 shall not affect any registration rights
previously granted by the Company.
5. Amendment. Any provision of this Agreement may be amended or the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the Holders.
6. Governing Law. This Agreement and the legal relations between the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of Delaware.
7. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties regarding the matters set forth
herein. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon the successors, assigns,
heirs, executors and administrators of the parties hereto.
8. Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery to the party to be notified in person, by facsimile or by
overnight delivery service or five (5) days after deposit with the United States
mail, by registered or certified mail, postage prepaid, addressed (a) if to the
Holders, at each Holder's address as set forth in the Share Purchase Agreement,
or at such other address as such Holder shall have furnished to the Company in
writing in accordance with this Section 8, or (b) if to the Company, at its
address for notices set forth in the Stock Purchase Agreement.
7
9. Changes in Ordinary Shares. If, and as often as, there is any change
in the Ordinary Shares by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, then appropriate adjustment shall be
made in the provisions hereof so that the rights and privileges granted hereby
shall continue with respect to the Registrable Shares as so changed.
10. Listing of Ordinary Shares. The Company shall, at its expense, list
all of the Ordinary Shares owned by each Holder of any class of stock of the
Company that is at any time listed on a national securities exchange with such
national securities exchange.
11. Attorneys' Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party shall be entitled
to all costs and expenses of maintaining such suit or action, including
reasonable attorney's fees.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. 13. Relief. In addition to any other relief
which may be available to Holder hereunder at law or in equity, Holder shall
have the right to seek specific performance of the Company's obligations
hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.
"COMPANY"
COMMTOUCH SOFTWARE LTD.
an Israeli company
By:
---------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
GO2NET, INC.
a Delaware corporation
By:
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President of Business Development
VULCAN VENTURES INCORPORATED
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
