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EXHIBIT 4.2
CKS GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("AGREEMENT") is made as of June 17,
1997, between CKS Group, Inc., a Delaware corporation ("PARENT" or "CKS"), and
the Company Shareholders listed on EXHIBIT A hereto, pursuant to that certain
Agreement and Plan of Reorganization among Parent, SiteSpecific, Inc., a New
York corporation (the "COMPANY"), East Coast Acquisition Corp., a New York
corporation and a wholly owned subsidiary of Parent ("SUB"), Xxxx Xxxxxxxxx,
Xxxxxx X. Xxxxxxx and Xxxxx-Xxxxx Communications, Inc., a Delaware corporation
and, with respect to Article VII thereto, Xxxxx Xxxxxxxx and Xxxxxx X. Xxxxxxx,
as Shareholder Representatives, and Chase Trust Company of California, as Escrow
Agent, dated May 15, 1997 (the "REORGANIZATION AGREEMENT").
1. DEFINITIONS. As used in this Agreement:
(a) "EFFECTIVE TIME" means the Effective Time as defined in
Article I of the Reorganization Agreement.
(b) "FORM S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which similarly permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the commission.
(c) "MATERIAL EVENT" means the happening of any event during the
period that the registration statement described in Section 2 hereof is required
to be effective as a result of which, in the reasonable judgment of Parent, such
registration statement or the related prospectus contains or may contain any
untrue statement of a material fact or omits or may omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(d) "REGISTRABLE SECURITIES" means 50% of the Merger Shares
issued to the Company Shareholders (including the Escrow Shares), which are
eligible for registration by Parent pursuant Section 5.1 of the Reorganization
Agreement.
(e) "SEC" means the Securities and Exchange Commission.
(f) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
Terms not otherwise defined herein have the meanings given to
them in the Reorganization Agreement.
2. REGISTRATION. Parent shall use commercially reasonable efforts to
cause the Registrable Securities issued to the Company Shareholders to be
registered under the Securities Act no later than 180 days after the Effective
Time, so as to permit the resale thereof, and in connection therewith shall
prepare and file with the SEC and shall use commercially reasonable efforts to
cause to become
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effective, a Form S-3 covering the Registrable Securities; provided, however,
that the Company Shareholders shall provide all such information and materials
relating to the Company Shareholders, as applicable, and take all such action as
may be required in order to permit Parent to comply with all the applicable
requirements of the SEC and to obtain any desired acceleration of the effective
date of such Form S-3, such provision of information and materials to be a
condition precedent to the obligations of Parent pursuant to this Agreement and
the Reorganization Agreement. The offerings made pursuant to such registrations
shall not be underwritten. Notwithstanding the foregoing, Parent shall not be
required to cause the Registrable Securities to be registered if Parent's legal
counsel delivers a legal opinion to the Company Shareholder seeking to sell all
of its Registrable Securities that such sale may be effected in a single
three-month period without registration under the Securities Act pursuant to
Rule 144 under the Securities Act.
3. POSTPONEMENT OF REGISTRATION.
(a) Registration. Notwithstanding Section 2 above, Parent shall
be entitled to postpone the declaration of effectiveness of any Form S-3
prepared and filed pursuant to Section 2 for a reasonable period of time, but
not in excess of 60 calendar days after the applicable deadline, if the Board of
Directors of Parent, acting in good faith, determines that there exists material
non-public information about CKS.
(b) Material Event. The Company Shareholders agree that, upon
receipt of any notice from Parent of the happening of a Material Event, the
Company Shareholders will forthwith discontinue disposition of the Registrable
Securities pursuant to any Form S-3 described in Section 2 until the Company
Shareholders' receipt of copies of supplemented or amended prospectuses prepared
by Parent (which Parent will use its commercially reasonable efforts to prepare
and file promptly), and, if so directed by Parent, the Company Shareholders will
deliver to Parent all copies in their possession, other than permanent file
copies then in the Company Shareholders' possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such notice. In no
event shall Parent delay causing to be effective a supplement or post-effective
amendment to any Form S-3 pursuant to Section 2 or the related prospectus, for
more than 90 consecutive days or 120 days during any 365 consecutive calendar
day period.
4. OBLIGATIONS OF PARENT. Except as set forth in Sections 2 and 3,
Parent shall (i) prepare and file with the SEC the Form S-3 in accordance with
Section 2 hereof with respect to the shares of Registrable Securities and shall
use commercially reasonable efforts to cause such Form S-3 to become effective
as provided in Section 2 and to keep such Form S-3 continuously effective until
the earlier to occur of (A) the sale of all of the Registrable Securities so
registered and (B) the first anniversary of the Effective Time; (ii) furnish to
the Company Shareholders such number of copies of any prospectus (including any
preliminary prospectus and any amended or supplemented prospectus), as the
Company Shareholders may reasonably request in order to effect the offering and
sale of the shares of the Registrable Securities to be offered and sold, but
only while Parent shall be required under the provisions hereof to cause such
Form S-3 to remain current; (iii) use its commercially reasonable efforts to
register or qualify the shares of the Registrable Securities covered by such
Form S-3 under the securities or blue sky laws of such jurisdictions as the
Company Shareholders shall reasonably request (provided that
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Parent 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 jurisdiction where it has not been qualified), and do any and all other
acts or things which may be reasonably necessary or advisable to enable the
Company Shareholders to consummate the public sale or other disposition of the
Registrable Securities in such jurisdictions; (iv) cause all such Registrable
Securities to be listed on each securities exchange or National Association of
Securities Dealers, Inc. Automated Quotation System on which similar securities
issued by Parent are then listed; (v) notify the Company Shareholders upon the
happening of any event as a result of which the prospectus included in such Form
S-3, 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; (vi) so long as the Form S-3 remains effective, promptly prepare, file
and furnish to the Company Shareholders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of the Registrable Securities, such
prospectus shall not include an 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 not misleading in the light of the circumstances then
existing; (vii) notify the Company Shareholders promptly after it shall receive
notice thereof, of the date and time any Form S-3 and each post-effective
amendment thereto has become effective or a supplement to any prospectus forming
a part of such Form S-3 has been filed; (viii) notify the Company Shareholders
promptly of any request by the SEC for the amending or supplementing of such
Form S-3 or prospectus or for additional information; and (ix) advise the
Company Shareholders promptly after it shall receive notice or obtain knowledge
thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of any Form S-3 or the initiation or threatening of any proceeding
for that purpose and promptly use commercially reasonable efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued.
5. EXPENSES. Parent shall pay the expenses incurred by Parent in
connection with any registration of Registrable Securities pursuant to this
Agreement including all SEC, NASD and blue sky registration and filing fees,
printing expenses, transfer agents' and registrars' fees, and the reasonable
fees and disbursements of Parent's outside counsel and independent accountants.
The Company Shareholders shall be responsible for all commissions and transfer
taxes, as well as any other expenses incurred by the Company Shareholders, other
than the fees and disbursements of counsel to the Company Shareholders not
exceeding $1,000, which shall be paid by Parent.
6. INDEMNIFICATION. In the event of any offering registered pursuant to
this Agreement:
(a) Parent will indemnify each Company Shareholder with respect
to any registration effected pursuant to this Agreement, against all expenses,
claims, losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, or any amendment or supplement thereto, or prospectus related
thereto, incident to any 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 statements therein, in light of the circumstances in which
they are made, not misleading, or any violation by Parent of any rule or
regulation promulgated under the Securities Act, or state securities laws, or
common law,
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applicable to Parent in connection with any such registration, and will
reimburse such Company Shareholder, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that Parent will not be
liable in any such case (i) to the extent that any such claim, loss, damage,
liability or expense arises out of or is based in any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to Parent by an instrument duly
executed by such Company Shareholder and stated to be specifically for use
therein or (ii) if a copy of the final prospectus relating to any registration
statement (as then amended or supplemented if Parent shall have furnished any
amendments or supplements thereto) (the "FINAL PROSPECTUS") was not sent or
given by or on behalf of such Company Shareholder to a purchaser of the Company
Shareholder's Registrable Securities, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Registrable Securities to such purchaser, and if the final prospectus (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability.
(b) Each Company Shareholder will severally indemnify Parent,
each of its directors and officers, each person who controls Parent within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) or a material fact contained in
any registration statement, or any amendment or supplement thereto, or
prospectus related thereto, 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, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus in reliance upon and in
conformity with written information furnished to Parent by an instrument duly
executed by such Company Shareholder and stated to be specifically for use
therein and will reimburse Parent, the remaining Company Shareholders, such
directors, officers, or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
is made in such registration statement or prospectus, in reliance upon and in
conformity with written information furnished to Parent by an instrument duly
executed by such Company Shareholder and stated to be specifically for use
therein.
(c) Each party entitled to indemnification under this Section 6
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has notice 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, 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, except to the
extent, but only to the extent, that the Indemnifying Party's ability to defend
against such claim or litigation is impaired as a result of such failure to give
notice. 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 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.
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Whether or not the defense of any claim or action is assumed by the Indemnifying
Party, such Indemnifying Party will not be subject to any liability for any
settlement without its consent.
(d) The obligations of Parent and the Company Shareholders under
this Section 6 shall survive the completion of any offering of stock in a
registration statement under this Agreement.
7. NON-ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause Parent to
register Registrable Securities pursuant to this Agreement may not be assigned
by the Company Shareholders to any person or entity; provided, however, that
upon the death of any Company Shareholder, the rights to cause Parent to
register Registrable Securities pursuant to this Agreement shall inure to such
Company Shareholder's devisee, legatee or other designee; and provided, further,
that a Company Shareholder that is a corporation may assign the rights to cause
Parent to register Registrable Securities pursuant to this Agreement to any
wholly owned subsidiary of such Company Shareholder.
8. AMENDMENT OF REGISTRATION RIGHTS. This Agreement may be amended by
the holders of a majority of the Registrable Securities and Parent at any time
by execution of an instrument in writing signed on behalf of each of the
parties.
9. TERMINATION. The registration rights set forth in this Agreement
shall terminate as to any Company Shareholder at such time as all of the
Registrable Securities then held by such Company Shareholder can be sold by such
Company Shareholder in a single 3-month period in accordance with Rule 144 under
the Securities Act.
10. GRANT OF ADDITIONAL REGISTRATION RIGHTS. The Company Shareholders
acknowledge that Parent may acquire other companies and in the course of such
acquisitions may grant the equity owners thereof registration rights with
respect to their shares of Parent on terms which would be negotiated at such
time and may be materially different than the terms of this Agreement.
11. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
delivery to the party to be notified in person or by courier service or five
days after deposit with the United States mail, postage prepaid, addressed (a)
if to the Company Shareholders, at the Company Shareholders' addresses as set
forth in the securities register of Sub or Parent as the case may be or (b) if
to Parent at 00000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Executive Vice President--Business Development.
12. GOVERNING LAW; INTERPRETATION. This Agreement shall be construed in
accordance and governed for all purposes by the laws of the State of New York
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
13. SEVERABILITY; SURVIVAL. If any portion of this Agreement is held by
a court of competent jurisdiction to conflict with any federal, state or local
law, or to be otherwise invalid or unenforceable, such portion of this Agreement
shall be of no force or effect, and this Agreement shall otherwise remain in
full force and effect and be construed as if such portion had not been included
in this Agreement.
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14. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding of the parties and supersedes all prior discussions, agreement and
understandings relating to the subject matter hereof.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
IN WITNESS WHEREOF, Parent and the Company Shareholders have caused this
Agreement to be executed as of the date first above written.
CKS GROUP, INC.
/s/ XXXXXX X. XXXXXXXX
---------------------------------
Signature of Authorized Signatory
Executive Vice President
---------------------------------
Print Name and Title
COMPANY SHAREHOLDERS
/s/
---------------------------------
Signature of Authorized Signatory
---------------------------------
Print Name of Shareholder
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
Shareholders of SiteSpecific, Inc.
Xxxx Xxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxx-Xxxxx Communications, Inc.
Xxxxx Xxxxxxx
Xxxx Xxxx
Xxxx Xxxxxx
Xxxxxx Xxxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
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