Execution Copy
EXHIBIT 10.3
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made as of December 23, 2002, by and between AdStar, Inc., a
Delaware corporation ("AdStar"), and Tribune Company, a Delaware corporation
(the "Investor").
WHEREAS, on March 18, 2002, the Investor purchased 1,443,457 shares of
Series A Preferred Stock, $0.0001 par value per share, of AdStar (the "Series A
Preferred Stock") pursuant to the terms of the Series A Preferred Stock Purchase
Agreement dated as of March 18, 2002, by and between AdStar and the Investor
(the "Series A Purchase Agreement");
WHEREAS, pursuant to the terms of, and in partial consideration for the
Investor's agreement to enter into, the Series A Purchase Agreement, AdStar and
the Investor entered into that certain Registration Rights Agreement dated March
18, 2002 (the "Original Registration Rights Agreement"), to provide the Investor
with certain registration rights, as well as certain other rights and remedies
with respect to the Series A Preferred Stock;
WHEREAS, on the date hereof, the Investor will be purchasing 1,200,000
shares of Series B-1 Preferred Stock, $0.0001 par value per share, of AdStar
(the "Series B-1 Preferred Stock") pursuant to the terms of the Series B
Preferred Stock Purchase Agreement dated as of December 23, 2002, by and between
AdStar and the Investor (the "Series B Purchase Agreement");
WHEREAS, at the Subsequent Closing (as defined in the Series B Purchase
Agreement), the Investor will be purchasing certain shares of Series B-2
Preferred Stock, $0.0001 par value per share, of AdStar (the "Series B-2
Preferred Stock," and together with the Series B-1 Preferred Stock, the "Series
B Preferred Stock") and will be exchanging its shares of Series B-1 Preferred
Stock for additional shares of Series B-2 Preferred Stock;
WHEREAS, pursuant to the terms of, and in partial consideration for the
Investor's agreement to enter into, the Series B Purchase Agreement, AdStar has
agreed to enter into this Agreement amending and restating the Original
Registration Rights Agreement to provide the Investor with certain registration
rights, as well as certain other rights and remedies set forth in this Agreement
with respect to the Series B Preferred Stock;
WHEREAS, it is contemplated that the Investor may transfer a portion of
its Series A Preferred Stock to Xxxxxx-Xxxxxx, Inc., a Florida corporation
("Knight Ridder"), and/or a portion of its Series B Preferred Stock to Knight
Ridder Digital, Inc., a Delaware corporation ("Knight Ridder Digital"), and
Gannett Co., Inc., a Delaware corporation ("Gannett") in which case Knight
Ridder, Knight Ridder Digital and/or Gannett shall be entitled to all the rights
and benefits to which the Investor is entitled under this Agreement; and
WHEREAS, the Series B Purchase Agreement is conditioned upon this
Agreement being executed by the parties hereto.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions.
1.1 Unless otherwise provided in this Agreement, capitalized terms
used herein shall have the following meanings:
"AdStar" has the meaning set forth in the first paragraph hereof.
"Agreement" has the meaning set forth in the first paragraph hereof.
"Investor" has the meaning set forth in the first paragraph hereof.
"Registrable Securities" means (a) any Common Stock issued upon the
conversion of any Series A Preferred Stock, (b) any Common Stock issued upon the
conversion of any Series B Preferred Stock and (c) any Common Stock issued or
issuable with respect to the securities referred to in clauses (a) and (b) by
way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (i) all such securities may be sold in accordance
with Rule 144(k) of the Securities Act or (ii) they have been distributed to the
public pursuant to an offering registered under the Securities Act or sold to
the public through a broker, dealer or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force). For purposes of
this Agreement, a Person shall be deemed to be the holder of Registrable
Securities, and the Registrable Securities shall be deemed to be outstanding and
in existence, whenever such Person has the right to acquire such Registrable
Securities upon conversion of Series A Preferred Stock or conversion of Series B
Preferred Stock or conversion or exercise of any other securities held by such
Person, whether or not such acquisition has actually been effected, and such
Person shall be entitled to exercise the rights of a holder of such Registrable
Securities hereunder.
"Resale Registration" has the meaning set forth in Section 2.1.
"SEC" means the Securities and Exchange Commission, including any
governmental authority or agency succeeding to the functions thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" has the meaning set forth in the first recital
above.
"Series A Purchase Agreement" has the meaning set forth in the first
recital above.
"Series B Preferred Stock" has the meaning set forth in the fourth recital
above.
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"Series B-1 Preferred Stock" has the meaning set forth in the third
recital above.
"Series B-2 Preferred Stock" has the meaning set forth in the fourth
recital above.
"Series B Purchase Agreement" has the meaning set forth in the third
recital above.
1.2 Unless otherwise stated, other capitalized terms used but not
defined herein shall have the meanings set forth in the Series A Purchase
Agreement.
2. Resale Registrations.
2.1 Requests for Registration. At any time following the date
hereof, the holders of at least a majority of the Registrable Securities may
request registration under the Securities Act permitting the resale of all or
any portion of its Registrable Securities (the "Resale Registration") pursuant
to Rule 415 of the Securities Act (or any similar rule then in force). Within
ten days after receipt of any such request, AdStar shall give written notice of
such requested registration to all other holders of Registrable Securities and
shall include in such registration all Registrable Securities with respect to
which AdStar has received written requests for inclusion therein within 15 days
after the receipt of AdStar's notice; provided, that, if such request comes
after 45 days but prior to 90 days after AdStar's fiscal year end, AdStar shall
not be required to file any Resale Registration until the 90th day following the
fiscal year end.
2.2 Restrictions on Registration. AdStar may postpone for up to 30
days the filing or the effectiveness of the registration statement with respect
to the Resale Registration if AdStar reasonably believes that the Resale
Registration will have a material adverse effect on any proposal or plan by
AdStar to engage in any financing, acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or other
significant transaction.
3. Registration Procedures. Upon the request of at least a majority of the
holders of Registrable Securities for the Resale Registration pursuant to this
Agreement, AdStar shall use its best efforts to effect the registration and the
sale of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto AdStar shall as expeditiously as
possible:
3.1 prepare and file with the SEC a registration statement (it being
agreed that AdStar would intend to use Form S-3 or Form S-2, if available) with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
AdStar shall furnish to the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement copies of all such
documents proposed to be filed, which documents shall be subject to the review
and comment of such counsel);
3.2 notify each holder of Registrable Securities of the
effectiveness of such registration statement and prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement accurate and effective until the earlier of (i) the date
on which
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all Registrable Securities have been sold or (ii) all such unsold Registrable
Securities may be sold in any single 90-day period pursuant to Rule 144 of the
Securities Act.
3.3 furnish to each holder of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by the such seller;
3.4 use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided, however, that AdStar shall not be required to (a) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection, (b) subject itself to taxation in
any such jurisdiction or (c) consent to general service of process in any such
jurisdiction);
3.5 notify each holder of Registrable Securities, 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 contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, AdStar shall prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the sellers of
such Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading;
3.6 cause all such Registrable Securities to be listed on each
securities exchange or NASDAQ market on which similar securities issued by
AdStar are then listed;
3.7 make available for inspection by any seller of Registrable
Securities and any attorney, accountant or other agent retained by any such
seller, all financial and other records, pertinent corporate documents and
properties of AdStar, and cause AdStar's officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such seller or any such attorney, accountant or agent in connection with such
registration statement;
3.8 otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first day of AdStar's first full calendar
quarter after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;
3.9 upon the request of any holder of Registrable Securities, insert
language into the registration statement to the effect that the holding by such
holder of such securities is not to be construed as a recommendation by such
holder of the investment quality of AdStar's
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securities covered thereby and that such holding does not imply that such holder
shall assist in meeting any future financial requirements of AdStar;
3.10 in the event of the issuance of any stop order suspending the
effectiveness of a registration statement or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, AdStar shall use its best efforts promptly to obtain the
withdrawal of such order; and
3.11 use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities.
4. Registration Expenses. All expenses incident to AdStar's performance of
or compliance with this Agreement, including, without limitation, all
registration and filing fees, fees of any transfer agent and registrar, fees and
expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, fees and disbursements of custodians, fees and
disbursements of counsel for AdStar and its independent certified public
accountants, AdStar's internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by AdStar are then listed or on the NASDAQ (all
such expenses being herein called "Registration Expenses") shall be borne by
AdStar.
5. Indemnification.
5.1 AdStar agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to AdStar by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after AdStar
has furnished such holder with a sufficient number of copies of the same.
5.2 Each holder of Registrable Securities shall furnish to AdStar in
writing such information and affidavits as AdStar reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, shall indemnify AdStar, its directors and officers and each
Person who controls AdStar (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make
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the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such holder expressly for use in such registration statement or
prospectus; provided, that, the obligation to indemnify shall be individual, not
joint and several, for each holder and shall be limited to the net amount of
proceeds received by such holder from the sale of Registrable Securities
pursuant to such registration statement.
5.3 Any Person entitled to indemnification hereunder shall (a) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (b) unless in the
written opinion of legal counsel to such indemnified or indemnifying parties a
conflict of interest between such indemnified and indemnifying parties exists
with respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying party shall not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent shall not be unreasonably withheld). An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment (with written advice of counsel) of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
5.4 The indemnification provided for under this Agreement shall
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 party and shall survive the transfer of securities. AdStar
also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event AdStar's
indemnification is unavailable for any reason.
6. Miscellaneous.
6.1 No Inconsistent Agreements. AdStar shall not hereafter enter
into any agreement with respect to its securities that is inconsistent with or
violates the rights granted to the holders of Registrable Securities in this
Agreement.
6.2 Remedies. Each holder of Registrable Securities shall be
entitled to enforce any rights it has under this Agreement specifically (without
posting any bond or other security) to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law.
6.3 Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of AdStar and the holders of a majority of the Registrable
Securities.
6.4 Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective
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successors and assigns of the parties hereto whether so expressed or not. The
sale by the Investor of a portion of its Series A Preferred Stock and/or its
Series B Preferred Stock to Knight Ridder, Knight Ridder Digital or Gannett, as
applicable, shall qualify as an assignment under this Section 6.4, and after any
such sale Knight Ridder Knight Ridder Digital or Gannett, as applicable, shall
be entitled to all rights and remedies (and shall be bound by all obligations)
of a holder of Registrable Securities hereunder.
6.5 Entire Agreement. This Agreement, together with the Series A
Purchase Agreement, the Series B Purchase Agreement and all agreements
contemplated thereby, constitutes the entire agreement of the parties hereto
with respect to the subject matter contained herein, and supersedes all prior
agreements, negotiations, discussions and understandings among the parties
hereto with respect to such subject matter.
6.6 Severability. Wherever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law and in such a way as to, as closely as possible, achieve the
intended economic effect of such provision and this Agreement as a whole, but if
any provision contained herein is, for any reason, held to be invalid, illegal
or unenforceable in any respect, such provision shall be ineffective to the
extent, but only to the extent, of such invalidity, illegality or
unenforceability without invalidating the remainder of such provision or any
other provisions hereof, unless such a construction would be unreasonable.
6.7 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
(a) when delivered personally, (b) if transmitted by facsimile when confirmation
of transmission is received, (c) if sent by registered or certified mail,
postage prepaid, return receipt requested, three Business Days after mailing or
(iv) if sent by reputable overnight courier service, one Business Day after
delivery to such service; and shall be addressed as follows:
If to AdStar, to: with a copy to:
AdStar, Inc. Morse, Zelnick, Rose & Lander, LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 000 000 Xxxx Xxxxxx
Xxxxxx xxx Xxx, Xxxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, President and Attention: Xxxxxxx X. Xxxxxxx, Esq.
Chief Executive Officer Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investor, to: with a copy to:
Tribune Company Sidley Xxxxxx Xxxxx & Xxxx
000 X. Xxxxxxxx Xxx. Bank Xxx Xxxxx
Xxxxxxx, XX 00000 00 Xxxxx Xxxxxxxx Xxxxxx
Attention: General Counsel Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000 Attention: Xxxxx X. Xxxxxx
Xxx X. Xxxxxx
Facsimile: (000) 000-0000
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and also to:
Tribune Company
000 X. Xxxxxxxx Xxx.
Xxxxxxx, XX 00000
Attention: VP/Strategy and Development
Facsimile: (000) 000-0000
6.8 Governing Law. This Agreement and the exhibits and schedules
hereto shall be governed by, and construed in accordance with, the laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
rules or provisions (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Illinois. In furtherance of the foregoing, the internal law of the
State of Illinois shall control the interpretation and construction of this
Agreement (and all schedules and exhibits hereto), even though under that
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
6.9 Execution in Counterparts. This Agreement may be executed in any
number of counterparts (including via facsimile), each of which will be
considered an original instrument, but all of which together will be considered
one and the same agreement, and will become binding when one or more
counterparts have been signed by and delivered to each of the parties.
6.10 Delivery by Facsimile. This Agreement, to the extent signed and
delivered by means of a facsimile machine, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of any party, each other party shall
reexecute original forms thereof and deliver them to all other parties. No party
shall raise the use of a facsimile machine to deliver a signature or the fact
that any signature or agreement or instrument was transmitted or communicated
through the use of a facsimile machine as a defense to the formation or
enforceability of a contract and each such party forever waives any such
defense.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed the day and year first above written.
ADSTAR, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive Officer
TRIBUNE COMPANY
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President/Tribune Classifieds
