GPN NETWORKS, INC.
INVESTORS RIGHTS AGREEMENT
THIS INVESTORS RIGHTS AGREEMENT (the "Rights Agreement") is entered
into as of January 8, 2002, by and among GPN Network, Inc., a Delaware
corporation (the "Company") and Xxxx Xxxxxx (the "Purchaser").
RECITALS:
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A. Concurrently herewith, the Purchaser and the Company are
entering into a subscription agreement dated of even date herewith, pursuant to
which the Purchaser is purchasing from the Company in the aggregate 2,500,000
Units, each unit consisting of two shares of the Company's common stock ("Common
Stock") and one warrant ("Warrant") to purchase Common Stock.
B. The obligations of the Purchaser to purchase the
Units are conditioned upon, among other things, the execution and delivery of
this Rights Agreement by the Purchaser and the Company.
AGREEMENT:
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NOW, THEREFORE, in consideration for and of the foregoing and of the
mutual promises, covenants and conditions set forth herein and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Registration Rights.
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1.1 Definitions. As used in this Rights Agreement, the following terms
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shall have the following respective meanings:
(a) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended, and the declaration or
ordering of the effectiveness of such registration statement.
(b) The term "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(c) The term "Registrable Securities" means (i) the Common Stock; (ii) any and
all shares of Common Stock or other securities issued or issuable upon exercise
of the Warrants and (iii) any and all shares of Common Stock or other securities
issued or issuable upon any stock split, stock dividend, recapitalization or
similar event affecting the Common Stock or the shares of Common Stock or other
securities issued or issuable upon exercise of the Warrants; provided, however,
that any and all shares described in clauses (i)-(iii) above which have been
resold to the public or are registered shall cease to be Registrable Securities
upon such resale and any shares as to which registration rights have terminated
pursuant to Section 1.13 below shall cease to be Registrable Securities upon
such termination.
(d) The terms "Holder" or "Holders" means any person or persons to whom
Registrable Securities were originally issued or qualifying transferees under
subsection 1.10 hereof who hold Registrable Securities.
(e) The term "Initiating Holders" means any Holder or Holders holding thirty
percent (30%) or greater of the aggregate of the Common Stock issued or issuable
upon conversion thereof which are Registrable Securities.
(f) The term "Securities Act" means the Securities Act of 1933, as amended.
(g) The term "SEC" means the Securities and Exchange Commission.
(h) The term "Registration Expenses" shall mean all expenses incurred by the
Company in complying with subsections 1.2, 1.3 and 1.4 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, 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,
Selling Expenses and fees and disbursements of legal counsel for the Holders.)
(i) The term "Holder Affiliates" means any of the mother, father, descendants,
brother(s), sister(s), or spouse of any Holder or any trustee or trustees for
the benefit of any one or more of the foregoing (including such mother, father,
brother(s), sister(s) or spouse).
(j) The term "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities.
1.2 Demand Registration.
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(a) Request for Registration. In case the Company shall receive from Initiating
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Holders a written request that the Company effect a registration with respect to
Registrable Securities, the Company will:
(i) within ten (10) days give written notice of the proposed registration
to all other Holders; and
(ii) as soon as practicable, subject to the limitations set below, use its best
efforts to effect all such registrations (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualifications under the applicable blue sky or other state securities laws and
appropriate compliance with exemptive regulations issued under the Securities
Act and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution of all or
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such portion of such Initiating Holder's Registrable Securities as are specified
in such request, together with all or such portion of the Registrable Securities
of any Holder or Holders joining in such request as are specified in a written
request given within thirty (30) days after receipt of such written notice from
the Company; provided, however, that the Company shall not be obligated to take
any action to effect such registration pursuant to this subsection 1.2(a):
(A) at any time prior to 180 days from the date hereof;
(B) in any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration
unless the Company is already subject to service in such jurisdiction and except
as required by the Securities Act;
(C) after the Company has effected three (3) such registrations pursuant to this
subsection 1.2(a) and such registrations have been declared or ordered
effective;
(D) during the period starting within the date sixty (60) days prior to the
Company's good faith estimate of the date of filing of, and ending on a date
ninety (90) days after the effective date of, a Company-initiated registration;
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective; or
(E) if the Initiating Holders propose to dispose of shares of Registrable
Securities which may be immediately registered on Form S-3 pursuant to a request
made under Section 1.4 hereof.
Subject to the foregoing clauses (A) through (C), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practical, but in any event within ninety (90) days,
after receipt of the request or requests of the Initiating Holders; provided,
however, that if the Company shall furnish to such Holders a certificate signed
by the President or Chief Executive Officer of the Company stating that in the
good faith judgment of the Company's board of directors (the "Board of
Directors"), it would be detrimental to the Company and its stockholders for
such registration statement to be filed on or before the date filing would be
required and it is therefore essential to defer the filing of such registration
statement, the Company shall have the right to defer such filing for a period of
not more than one hundred twenty (120) days after the furnishing of such a
certificate of deferral; and provided, further, however, that the Board of
Directors shall not exercise such right to defer a filing more than once in any
period of twelve (12) consecutive months.
(b) Underwriting. If the Initiating Holders intend to distribute the Registrable
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Securities covered by their request by means of an underwriting, they shall so
advise the Company as part of their request made pursuant to subsection 1.2(a)
and the Company shall include such information in the written notice referred to
in subsection 1.2(a)(i). In such event, the underwriter shall be selected by a
majority in interest of the Initiating Holders and shall be reasonably
acceptable to the Company. The right of any Holder to registration pursuant to
subsection 1.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. The Company
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shall (together with all Holders proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters. Notwithstanding any other provision
of this subsection 1.2, if the underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, the Initiating Holders shall so advise all Holders who have
elected to participate in such offering, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all such Holders thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Initiating Holders. Any Registrable
Securities which are excluded from the underwriting by reason of the
underwriter's marketing limitation or withdrawn from such underwriting shall be
withdrawn from such registration.
(c) Company Shares. If the managing underwriter has not limited the number of
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Registrable Securities to be underwritten, the Company, employees of the Company
and other holders of the Company's Common Stock may include securities for its
(or their) own account in such registration if the managing underwriter so
agrees and if the number of Registrable Securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.
1.3 Company Registration.
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(a) Registration. If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its stockholders other than the Holders (other than in connection with
a registration relating solely to employee stock option or purchase plans, a
registration on Form S-4, a registration relating solely to an SEC Rule 145
transaction, or a registration on any other form or any successor to such form,
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Securities), the Company will:
(i) within thirty (30) days prior to the filing of such registration
statement give to each Holder written notice thereof and
(ii) include in such registration (and any related qualification under blue sky
laws or other compliance with applicable laws), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within twenty (20) days after receipt of such written notice from
the Company, by any Holder or Holders, except as set forth in subsection 1.3(b)
below.
(b) Underwriting. If the registration of which the Company gives notice is for a
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registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to subsection
1.3(a)(i). In such event the right of any Holder to registration pursuant to
subsection 1.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting 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 underwriter or
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underwriters selected for such underwriting by the Company. Notwithstanding any
other provision of this subsection 1.3, if the underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may limit the number of Registrable Securities to
be included in the registration and underwriting, or may exclude Registrable
Securities entirely from such registration and underwriting. In the event of a
cutback by the underwriters of the number of Registrable Securities to be
included in the registration and underwriting, the Company shall so advise all
Holders of Registrable Securities which would otherwise be registered and
underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be allocated
among Holders requesting registration in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities held by each of such Holders
as of the date of the notice pursuant to subsection 1.3(a)(i) above. If any
Holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
1.4 Form S-3. In addition to the rights and obligations set forth in subsection
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1.2(a) above, if Holders holding thirty percent (30%) or more of the Registrable
Securities then outstanding request that the Company file a registration
statement on Form S-3 (or any successor to Form S-3) for the public offering of
shares of Registrable Securities and the Company is then a registrant entitled
to use Form S-3 to register the shares for such an offering, the Company shall
use its best efforts to cause such shares to be registered for the offering as
soon as practicable on Form S-3 (or any successor form to Form S-3); provided,
however, the Company shall not be required to effect a registration pursuant to
this subsection 1.4:
(a) in any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act;
(b) if the Company, within twenty (20) days of the receipt of the request of the
notice described in subsection 1.4(a), gives notice of its bona fide intention
to effect the filing of a registration statement with the SEC within one hundred
twenty (120) days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction, an offering solely to
employees or any other registration which is not appropriate for the
registration of Registrable Securities), and does so file within said one
hundred twenty (120) day period and makes reasonable efforts to cause such
registration to become effective;
(c) during a period of one hundred eighty (180) days following the effective
date of a registration statement other than registration statements filed
pursuant to this subsection 1.4;
(d) if the Company shall furnish to the Holders requesting registration under
section 1.4(a) a certificate signed by the President or Chief Executive Officer
of the Company stating that in the good faith judgment of the Board of
Directors, it would be detrimental to the Company and its stockholders for such
registration statement to be filed on or before the date filing would be
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required and it is therefore essential to defer the filing of such registration
statement, in which case the Company shall have the right to defer such filing
for a period of not more than one hundred (120) days after the furnishing of
such a certificate of deferral; provided, however, that the Board of Directors
shall not exercise such right to defer a filing more than once in any period of
twelve (12) consecutive months period; or
(e) if the Company has, within the twelve (12) month period preceding the date
of a request to register shares on Form S-3 already effected two registrations
on Form S-3 for the Holders pursuant to this Subsection 1.4.
1.5 Expenses of Registration. All Registration Expenses incurred in connection
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with any registration pursuant to this Section 1 shall be borne by the Company
except that the Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to subsection 1.2 or 1.4, the request for
which has been subsequently withdrawn by the Initiating Holders (in which case,
such expenses shall be borne by the Holders requesting such withdrawal).
1.6 Registration Procedures. In the case of each registration, qualification or
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compliance effected by the Company pursuant to this Rights Agreement, the
Company will keep each Holder participating therein advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. Except as otherwise provided in subsection 1.5, at its
expense the Company will:
(a) Prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to ninety (90) days or, if a shorter
period, until securities included in the registration statement are sold;
provided, however, that (i) such 90-day period shall be extended for a period of
time equal to the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of Common Stock
(or other securities) of the Company; and (ii) 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 90-day period shall be extended, if necessary,
to keep the registration statement effective 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 (i) includes any prospectus required by Section 10(a)(3) of the Act or
(ii) reflects facts or events representing a material or fundamental change in
the information set forth in the registration statement, the incorporation by
reference of information required to be included in (i) and (ii) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the 1934
Act in the registration statement.
(b) Prepare 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.
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(c) Furnish to the Holders such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(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
United States 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.
(e) Notify each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act or 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.
(f) Cause all such Registrable Securities registered pursuant hereunder to be
listed on each securities exchange or market on which similar securities issued
by the Company are then listed or quoted.
(g) Furnish, at the request of any Holder requesting registration of Registrable
Securities pursuant to this Section 1, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 1, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(h) No Holder shall have any right to obtain or seek an injunction restraining
or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this
Section 1.
1.7 Indemnification.
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(a) The Company will indemnify and defend each Holder of Registrable Securities
and each of its officers, directors and partners, and each person controlling
such Holder, with respect to which a registration, qualification or compliance
has been effected pursuant to this Rights Agreement, and each underwriter, if
any, and each person who controls any underwriter of the Registrable Securities
held by or issuable to such Holder, against all claims, losses, expenses,
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damages and liabilities (or actions in respect thereto) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement or prospectus incident to such
registration, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, or any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any state securities law applicable to
the Company or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any such state law and relating to action or inaction required
of the Company in connection with any such registration, and will reimburse each
such Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any reasonable legal and any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.7(a) shall riot apply to amounts paid in
settlement of any such claim, loss, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld); and provided further, that the Company will not
be liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by such Holder or underwriter
specifically for use therein; and provided further, that the agreement of the
Company to indemnify any underwriter and any person who controls such
underwriter contained herein with respect to any such preliminary prospectus
shall not inure to the benefit of an underwriter, from whom the person asserting
any such claim, loss, damage, liability or action purchased the stock which is
the subject thereof, if at or prior to the written confirmation of the sale of
such stock, a copy, of the prospectus (or the prospectus as amended or
supplemented) was not sent to delivered to such person, excluding the documents
incorporated therein by reference, and the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
prospectus (or the prospectus as amended or supplemented).
(b) Each Holder will, if Registrable Securities held by or issuable to such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and defend the Company,
each of its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, 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 registration
statement or prospectus incident to such registration, 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 Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling 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, offering circular, prospectus
or other document in reliance upon and in conformity with written information
furnished to the Company by the Holder in an instrument duly executed by such
Holder specifically for use therein; provided, however, that the indemnity
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agreement contained in this subsection 1.7(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld); and provided further, that the total amount for
which any Holder shall be liable under this subsection 1.7(b) shall not in any
event exceed the aggregate gross proceeds received by such Holder from the sale
of Registrable Securities held by such Holder in such registration not including
underwriter's commissions and discounts.
(c) Each party entitled to indemnification under this subsection 1.7 (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, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at its own 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 hereunder, unless such failure resulted in
prejudice to the Indemnifying Party; and provided, further, however, that an
Indemnified Party (together with all other Indemnified Parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate 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 a conflict of interests
between such Indemnified Party and any other party represented by such counsel
in such proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of the 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 hereunder
if such Indemnified Party consents to entry of any judgment or enters into any
settlement without the consent of the Indemnifying Party. Any Indemnified Party
shall cooperate with the Indemnifying Party in the defense of any claim or
litigation brought against such Indemnified Party.
(d) If the indemnification provided for in this Section 1.7 is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party with respect
to, any losses, claims, damages or liabilities referred to herein, the
Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder,
shall, to the extent permitted by applicable law, contribute to the amount paid
or payable by such Indemnified Party as a result of such loss, claim, damage or
liability 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 violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
by a court of law by reference to, among other things, whether the untrue (or
alleged untrue) statement of a material fact or the omission (or alleged
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
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statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.
(e) The obligations of the Company and Holders under this Section 1.7 shall
survive completion of any offering of Registrable Securities in a registration
statement and the termination of this agreement. 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.
(f) The indemnification provided for in this Section 1.7 shall be superseded by
indemnification provided for in an underwriting agreement entered into by the
Company and an underwriter of Registrable Securities with respect to which a
registration has been effected pursuant to this Rights Agreement.
1.8 Information by Holder. Any Holder or Holders of Registrable Securities
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included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.9 Rule 144 Reporting. With a view to making available to Holders the benefits
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of certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees at
all times to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) so long as a Holder owns any Registrable Securities, to furnish to such
Holder forthwith upon written 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 Exchange Act, a copy of the most recent annual or
quarterly reports of the Company, and such other reports and documents so filed
by the Company as the Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing such Holder to sell any such securities
without registration.
1.10 Transfer of Registration Rights. Holders' rights to cause the Company to
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register their securities and keep information available, granted to them by the
Company under subsections 1.2, 1.3, 1.4 and 1.9, may be assigned (but only with
all related obligations) to a transferee or assignee; provided, however, that
the Company is given written notice by such Holder at the time of or within a
reasonable time after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned.
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1.11 Termination of Registration Rights. The obligations of the Company pursuant
to this Section 1 shall terminate (i) as to any Holder, at such time as such
Holder is able to sell all such Registrable Securities held by such Holder
within a single three month period under Rule 144 or such Holder is able to sell
all Registrable Securities held by it pursuant to Rule 144(k) promulgated under
the Securities Act, or (ii) once all Registrable Securities are registered.
2. General.
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2.1 Waivers and Amendments. With the written consent of the record or beneficial
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holders of sixty percent (60%) of the Registrable Securities, the obligations of
the Company and the rights of the Purchaser under this Rights Agreement may be
waived (either generally or in a particular instance, either retroactively or
prospectively, and either for a specified period of time or indefinitely). Upon
the effectuation of each such waiver, consent, agreement of amendment or
modification, the Company shall promptly give written notice thereof to the
record holders of the Registrable Securities who have not previously consented
thereto in writing.
2.2 Governing Law. This Rights Agreement shall be governed in all respects by
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the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
2.3 Successors and Assigns. Except as otherwise expressly provided herein, the
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provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
2.4 Entire Rights Agreement. Except as set forth below, this Rights Agreement
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and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.5 Notices, etc. All notices and other communications required or permitted
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hereunder shall be in writing and shall be sent via facsimile, overnight courier
service or mailed by certified mail, postage prepaid, return receipt requested,
addressed or sent (i) if to a Purchaser, at the address or facsimile number of
the Purchaser set forth in the Company's records, or at such other address or
number as the Purchaser shall have furnished to the Company in writing, or (ii)
if to the Company, at the Company's principal place of business or at such other
address or number as the Company shall have furnished to the Purchasers in
writing, and shall be effective (i) upon delivery if sent by facsimile (with a
confirming receipt); (ii) one day after delivery to an overnight courier
service; or (iii) three (3) days after deposit with the United States Post
Office if mailed postage prepaid by regular mail or airmail.
2.6 Severability. In case any provision of this Rights Agreement shall be
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invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Rights Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and subsections of this
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Rights Agreement are for convenience of reference only and are not to be
considered in construing this Rights Agreement.
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2.8 Counterparts. This Rights Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2.9 Aggregation of Stock. All shares held or acquired by affiliated entities or
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persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereby have executed this Investors
Rights Agreement on the date first above written.
"COMPANY"
GPN NETWORK, INC.,
a Delaware corporation
By:/s/Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
President and Chief Executive Officer
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PURCHASERS' COUNTERPART SIGNATURE PAGE
GPN NETWORK, INC.
INVESTORS RIGHTS AGREEMENT
January 8, 2002
"PURCHASER"
/s/Xxxx Xxxxxx
Xxxx Xxxxxx
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