EXHIBIT 10.16
INVESTOR'S RIGHTS AGREEMENT
THIS INVESTOR'S RIGHTS AGREEMENT (the "Agreement") is made as of April 1,
2003 by and among FIND/SVP, Inc., a New York corporation (the "Company"), Petra
Mezzanine Fund, L.P. (the "Investor"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx") and Xxxxx
Xxxxx ("Xxxxx", and together with Franklin, the "Major Shareholders").
RECITALS
WHEREAS, the Company proposes to issue shares of Series A Preferred Stock,
$0.0001 par value per share (the "Series A Preferred Stock") to the Investor
pursuant to the Series A Preferred Stock Purchase Agreement (the "Purchase
Agreement") by and among the Company and the Investor of even date herewith;
WHEREAS, the Company has requested that the Investor make available to the
Company a term loan in the original principal amount of Three Million Dollars
($3,000,000) (the "Loan");
WHEREAS, as consideration for the Investor making the Loan to the Company,
the Company proposes to grant the Investor a warrant (the "Warrant") to purchase
675,000 shares of the Company's common stock, $0.0001 par value per share (the
"Common Stock"); and
WHEREAS, to induce the Investor to enter into the Purchase Agreement and
make the Loan, the Company and the Investor have agreed to enter into this
Agreement to provide for certain rights, privileges and preferences in favor of
the Investor.
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants contained in this Agreement and the Purchase Agreement, the
receipt and sufficiency of which are hereby acknowledged, the parties mutually
agree as follows:
1. REGISTRATION RIGHTS
1.1. CERTAIN DEFINITIONS. The following terms shall have the following
respective meanings:
"HOLDER" shall mean the Investor so long as the Investor holds
Registrable Securities and any Person holding Registrable Securities to whom the
rights under this Section 1 have been transferred in accordance with Section
1.11.
"INITIATING HOLDERS" shall mean any Holder or Holders of at least
twenty-five percent (25%) of the Registrable Securities.
"REGISTRABLE SECURITIES" means (i) the Common Stock issued or
issuable upon conversion of the Series A Preferred Stock, upon exercise of the
Warrant or upon exercise of each Additional Warrant (as defined in the Warrant)
or (ii) stock issued in respect of the stock referred to in (i) as a result of a
stock split, stock dividend, recapitalization or the like, and in the case of
(i) and (ii) which has not been sold to the public or sold pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
excluding in all cases, however, any Registrable Securities transferred by any
Person in a transaction in which the rights under this Section 1 are not
assigned in accordance with this Agreement.
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 included
in Selling Expenses or as otherwise stated below, incurred by the Company in
complying with Sections 1.2, 1.3 and 1.4 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,
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) and the reasonable fees and
disbursements of one special counsel for all Holders as selling shareholders in
the event of each registration provided for in Section 1.2.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders. Such expenses shall be borne by the Holders.
1.2. REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to the provisions of Section
1.2(c) below, if at any time the Company shall receive from Initiating Holders a
written request that the Company effect any registration with respect to any of
their Registrable Securities in which either (i) the anticipated aggregate price
to the public is at least $500,000 or (ii) at least 250,000 shares of Common
Stock shall be registered, the Company will:
(i) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(ii) as soon as practicable, effect such registration,
qualification or compliance (including, without limitation, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable 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
such portion of such 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 received
by the Company within twenty (20) days after receipt of such written
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notice from the Company; PROVIDED, HOWEVER, that the Company shall not be
obligated to take any action to effect any such registration, qualification or
compliance pursuant to this Section 1.2:
(A) Within 180 days of the effective date of any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or
(B) After the Company has effected two (2) such
registrations pursuant to this Section 1.2, and such registrations have been
declared effective under the Securities Act; provided, however, that a
registration pursuant to this Section 1.2 shall not be considered a registration
for purposes of this Section 1.2(a)(ii)(B), (i) unless and until such
registration shall have become effective and all shares so registered have been
sold and (x) in the case of a registration on Form S-1 (or any successor form)
or Form S-2 (or any successor form), until one hundred eighty (180) days after
the effective date thereof or until all shares so registered have been sold, and
(y) in the case of a registration on Form S-3, until all Registrable Securities
included in such registration shall have been actually sold, (ii) if the Holders
withdraw their request at any time because such Holders (A) reasonably believed
that the registration statement contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements made therein (in light of the circumstances under which
they were made) not misleading, (B) notified the Company of such fact and
requested that the Company correct such alleged misstatement or omission, and
(C) the Company has refused to correct such alleged misstatement or omission, or
(iii) if at least 75% of the Registrable Securities requested to be registered
by the Holders are not included in a registration pursuant to this Section 1.2.
Subject to the foregoing clauses (A) and (B), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Initiating Holders.
(b) PRIORITY ON DEMAND REGISTRATIONS. The Company may include in any
registration pursuant to this Section 1.2 any securities which are not
Registrable Securities; provided, if such registration is an underwritten
offering and the managing underwriters advise the Company in writing that in
their opinion the number of Registrable Securities and other securities
requested to be included in such offering exceeds the number of Registrable
Securities and other securities, if any, which can be sold in an orderly manner
in such offering within a price range acceptable to the Holders of a majority of
the Registrable Securities to be included in such registration therein, without
adversely affecting the marketability of the offering, the Company shall include
in such registration prior to the inclusion of any securities which are not
Registrable Securities (i) first, the number of Registrable Securities requested
to be included by the Holders which in the opinion of such underwriters can be
sold in an orderly manner without affecting the marketability of the offering,
pro rata among the respective Holders thereof on the basis of the number of
Registrable Securities requested to be included therein by each such Holder, and
(ii) second, other securities which the Company has requested to be included in
such
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registration, pro rata among the respective holders thereof on the basis of the
amount of such securities requested to be included therein by each such holder.
(c) UNDERWRITING. In the event that a registration pursuant to this
Section 1.2 is for a registered public offering involving an underwriting, the
Company shall advise the Holders as part of the notice given pursuant to Section
1.2(a)(i) that the registered public offering shall be underwritten and the
right of any Holder to participate in such registration shall be conditioned
upon such Holder's participation in the underwriting arrangements required by
this Section 1.2(c), and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent requested shall be limited to the extent
provided herein.
The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company, subject to the reasonable consent of a majority of the Initiating
Holders requesting registration. Notwithstanding any other provision of this
Section 1.2, if the managing underwriter determines that marketing factors
require limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities to be included in such
registration. The Company shall so advise all Holders distributing their
securities through such underwriting and the number of shares of securities that
may be included in the registration and underwriting (other than on behalf of
the Company) shall be allocated among all Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities or other
securities requested to be included in such registration by such Holders;
provided, however, that the number of shares of Registrable Securities to be
included in such underwriting shall not be reduced unless all other securities
are first entirely excluded from the underwriting. To facilitate the allocation
of shares in accordance with the above provisions, the Company or the managing
underwriter may round the number of shares allocated to any Holder to the
nearest one hundred (100) shares.
(d) DEFERRAL OF REGISTRATION. Notwithstanding the provisions of
Section 1.2(a), if (i) in the good faith judgment of the Board of Directors of
the Company, a requested registration under this Section 1.2 would not be in the
best interest of the Company and the Board of Directors of the Company
concludes, as a result, that it is essential to defer the filing of such
registration statement at such time, and (ii) the Company shall furnish to the
Initiating Holders a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it
would not be in the best interest of the Company for such registration statement
to be filed in the near future and that it is, therefore, essential to defer the
filing of such registration statement, then the Company shall have the right to
defer such filing (except as provided in Section 1.2(a)(ii)(A) above) for a
period of not more than ninety (90) days after receipt of the request of the
Initiating Holders, and, provided further, that the Company shall not defer its
obligation in this manner more than once in any 12-month period.
1.3. COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time or from time to time the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans,
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(ii) a registration relating solely to a Securities and Exchange Commission
("SEC") Rule 145 transaction, (iii) a registration effected pursuant to Sections
1.2 or 1.4 or (iv) a registration on any registration form that does not permit
secondary sales or 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) promptly give to each Holder written notice thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance requirements), 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.
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.3(a)(i) above. In such event, the right of any Holder to
participate in such registration shall be conditioned upon such Holder's
participation in such underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and any other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 1.3, if the
managing underwriter determines that marketing factors require limitation of the
number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities to be included in such registration. The Company shall so
advise in writing all Holders distributing their securities through such
underwriting and the number of shares of securities that may be included in the
registration and underwriting (other than on behalf of the Company) shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities or other securities requested to be
included in such registration by such Holders; PROVIDED, HOWEVER, that
notwithstanding any terms set forth in that certain Registration Rights
Agreement, dated as of November 26, 1996, by and between the Company and SVP,
S.A., and assigned to Xxxxxx Equities, LLC and Xxxxx Associates, Inc. (the
"Registration Rights Agreement"), in no event shall the amount of Registrable
Securities of the Holders included in the offering be reduced below twenty-five
percent (25%) of the total amount of securities included in such offering (such
25% to be allocated among the participating Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities requested to be
included in such registration by such Holders), unless (i) such offering is the
initial public offering of the Company's Common Stock in which case the Holders
may be excluded entirely if the managing underwriter makes the determination
described above and all other holders of the Company's securities are first
excluded entirely or (ii) the Holders holding a majority of the Registrable
Securities consent in writing to such a reduction. To facilitate the allocation
of shares in accordance with the above provisions, the Company may round the
number of shares allocated to any Holder to the nearest one hundred (100)
shares.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the
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effectiveness of such registration, whether or not any Holder has elected to
include securities in such registration; provided, however, if the Holders elect
to use their demand registration right pursuant to Section 1.2, then such
registration shall be governed by Section 1.2 and it shall not be terminated.
1.4. REGISTRATION ON FORM S-3. If Initiating Holders request that the
Company file a registration statement on Form S-3 (or any successor form to Form
S-3) for a public offering of shares of the Registrable Securities in which
either (i) the anticipated aggregate price to the public is at least $500,000 or
(ii) at least 250,000 shares of Common Stock shall be registered, and the
Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall cause such Registrable
Securities to be registered for the offering on such form and to cause such
Registrable Securities to be qualified in such jurisdictions as the Holders may
reasonably request; PROVIDED, HOWEVER, that the Company shall not be obligated
to effect any such registration (i) in the event that the Company shall furnish
the certification described in Section 1.2(d)(ii) (but subject to the
limitations set forth therein), or (ii) in a given calendar year, the Company
has effected two (2) such registrations, or (iii) in the event the Company will
be required to obtain an audit (other than for its normal year-end audit) for
such registration to become effective. The substantive provisions of Section
1.2(c) shall be applicable to each registration initiated under this Section
1.4.
1.5. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. Other than the
registration rights granted to Xxxxxx La Terra pursuant to his employment
agreement with the Company with respect to 150,000 shares of Common Stock, from
and after the date hereof, without the approval of the Investor or the Holders
of a majority of the Registrable Securities, the Company shall not enter into
any agreement granting any holder or prospective holder of any securities of the
Company registration rights equal to or superior to those of the Holders.
1.6. EXPENSES OF REGISTRATION. Except as otherwise provided herein, all
Registration Expenses incurred in connection with all registrations pursuant to
Section 1.2 and up to three (3) registrations pursuant to Sections 1.3 and 1.4
shall be borne by the Company; PROVIDED, HOWEVER, that the Holders shall bear
the Registration Expenses for any registration proceeding begun pursuant to
Section 1.2 and subsequently withdrawn by the Holders registering shares
therein, unless such withdrawal is based upon material adverse information
relating to the Company that is different from the information known to the
Holders requesting registration at the time of their request for registration
under Section 1.2. Unless otherwise stated, all Selling Expenses relating to
securities registered on behalf of the Holders shall be borne by the Holders of
such securities PRO RATA on the basis of the number of shares so registered.
1.7. REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 1,
the Company will keep each Holder advised in writing as to the initiation of
each registration and as to the completion thereof. 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
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registered thereunder, keep such registration statement effective for the
earlier of 180 days or until the distribution described in the registration
statement has been completed; provided, however, that (i) such 180-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 180-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 Securities Act, permits an offering on a continuous or
delayed basis, and provided further that applicable rules under the Securities
Act governing the obligation to file a post-effective amendment permit, in lieu
of filing a post-effective amendment which (A) includes any prospectus required
by Section 10(a)(3) of the Securities Act or (B) 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 (A) and (B) above to be contained in periodic reports
filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange 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.
(c) Furnish to the Holders, as expeditiously as reasonable, such
numbers of copies of the registration statement, each amendment and supplement
thereto, the 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 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, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement and any other customary
agreements, in usual and customary form, with the underwriters of such offering
and take all such actions reasonably requested to expedite or facilitate the
disposition of shares. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such an agreement.
(f) Notify each Holder covered by such registration statement 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
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material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities to be listed, prior to the
date of the first sale of such Registrable Securities pursuant to such
registration, on each securities exchange on which similar securities issued by
the Company are then listed and, if not so listed, to be listed with the
National Association of Securities Dealers automated quotation system (NASDAQ).
(h) Provide a transfer agent and registrar for all such Registrable
Securities and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration statement.
(i) Make available for inspection on a confidential basis by any
participating Holder, any underwriter participating in any disposition pursuant
to such registration statement, and the counsel to the participating Holders
whose expenses are being paid pursuant to Section 1.6 hereof, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees, independent accountants and
other advisors to supply on a confidential basis all information reasonably
requested by any such participating Holder, underwriter or attorney in
connection with such registration statement.
(j) Permit any participating Holder that, in its reasonable
judgment, might be deemed to be an underwriter or a controlling Person of the
Company within the meaning of Section 15 of the Securities Act, to participate
in the preparation of such registration or comparable statement and to permit
the insertion therein of material, furnished to the Company in writing, which in
the reasonable judgment of such participating Holder and its counsel should be
included, provided that such material shall be furnished under such
circumstances as shall cause it to be subject to the indemnification provisions
provided pursuant to Section 1.7 hereof.
(k) 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 Registrable Securities included in such registration statement for sale in
any jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order.
(l) Cooperate with the participating Holders and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be sold under such registration, and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriter or underwriters, if any, or such participating
Holders may reasonably request.
(m) 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
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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, and (ii) a letter, dated such date, from the independent
certified 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.
(n) Otherwise comply with all applicable rules and regulations of
the SEC, and make generally available to its security holders (as contemplated
by Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act as soon as reasonably
practicable after the end of the twelve month period beginning with the first
month of the Company's first fiscal quarter commencing after the effective date
of the registration statement, which statement shall cover said twelve month
period.
1.8. INDEMNIFICATION.
(a) To the extent permitted by law, the Company will indemnify each
Holder, each of its officers and directors and partners, and each Person
controlling such Person within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Section 1, and each underwriter for such Holder, 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 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, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers and directors and partners, and each Person
controlling such Holder, each such underwriter and each Person who controls any
such underwriter, as incurred, 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 the indemnity agreement
contained in this Section 1.8 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 Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable to any such Holder in any such case
to the extent that any such claim, loss, damage, liability or action arises out
of or is based on (i) 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 such Holder, any of its officers and
directors and partners, controlling Person of such Holder, underwriter or
controlling Person of such underwriter and stated to be specifically for use
therein or the preparation thereby
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or (ii) use or delivery by such Holder, controlling Person or underwriter of a
prospectus other than the most current prospectus made available to such Holder,
controlling Person or underwriter by the Company.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify 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 or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and partners and each Person controlling such other Holder within the meaning of
Section 15 of the Securities Act, 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 (i) 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 (ii) use or
delivery by such Holder of a prospectus other than the most current prospectus
made available to such Holder by the Company, and will reimburse the Company,
such other Holder, each of its directors, officers, partners, and each Person
controlling such Holder or the Company, each such underwriter and each Person
who controls any such underwriter for any legal and any other expenses
reasonably 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, other document, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Holder and specifically requested by the Company for use therein
or the preparation thereby. Notwithstanding the foregoing, the liability of each
Holder under this subsection (b) shall be limited to an amount equal to the
aggregate net proceeds received by such Holder from the shares sold by such
Holder in the offering in question.
(c) Each party entitled to indemnification under this Section 1.8
(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 not be withheld
unreasonably), and the Indemnified Party may participate in such defense at such
party's expense; PROVIDED HOWEVER, that the Indemnified Party shall have the
right to retain its own counsel, with 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 not be appropriate due to actual or
potential differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding, and provided further that the
failure of any Indemnified Party to give notice as provided herein shall relieve
the Indemnifying Party of its obligations under this Section 1.8 to
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the extent (but only to the extent) that 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 there is a conflict of interest or material separate and
different defenses. 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.
(d) If the indemnification provided for in this Section 1.8 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
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 statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by a Holder
under this Section 1.8(d) exceed the net proceeds from the offering received by
such Holder, except in the case of willful fraud by such Holder. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the 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 statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
(f) The obligations of the Company and Holders under this Section
1.8 shall survive the completion of any offering of Registrable Securities
pursuant to a registration statement under this Section 1, and otherwise.
1.9. INFORMATION BY HOLDER. As a condition to the Company's obligations to
complete a registration under 1.2, 1.3 or 1.4, the Holders of securities
included in any registration shall furnish to the Company such information
regarding such Holders, the Registrable Securities held by them and the
distribution proposed by such Holders as the Company may request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Section 1.
1.10. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Registrable
11
Securities to the public without registration, after such time as a public
market exists for the Common Stock 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, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Exchange Act;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to
the Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of the Exchange Act, 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,
unless otherwise obtainable through the SEC's website, in availing itself of any
rule or regulation of the SEC allowing the Holder to sell any such securities
without registration.
1.11. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
register securities granted to the Holders under Sections 1.2, 1.3 and 1.4 may
be assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by the Holder provided that the transferor
provides the Company with written notice of the proposed transfer, the
transferee agrees in writing to be bound by the provisions of this Section 1 and
all of the terms and conditions contained in the Purchase Agreement.
1.12. "MARKET STAND-OFF" AGREEMENT. If requested in writing by the Company
and an underwriter of Common Stock (or other securities) of the Company in
connection with the initial public offering of the Company, a Holder shall not
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by such shareholder (other than those included in the
registration) during a period not to exceed one hundred eighty (180) days
following the date of the prospectus included in such registration statement of
the Company filed under the Securities Act, provided that all officers and
directors of the Company and holders of at least five percent (5%) of the
Company's voting securities are bound by and have entered into similar
agreements.
The obligations described in this Section 1.12 shall not apply to a
registration relating solely to a transaction under Rule 145 under the
Securities Act or to an employee benefit plan of the Company. The Company may
impose stop-transfer instructions with respect to the shares (or securities)
subject to the foregoing restriction until the end of such one hundred eighty
(180)-day or shorter period.
1.13. TERMINATION. No Holder shall be entitled to exercise any rights
provided for in this Section 1 after the date that all shares of Registrable
Securities held or entitled to be held upon conversion by such Holder may
immediately be sold under Rule 144 during any 90-day period.
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2. PREEMPTIVE RIGHTS
2.1. RIGHT OF PURCHASE. The Company hereby grants to the Investor, so long
as such Investor shall own, of record or beneficially, or have the right to
acquire from the Company, any Registrable Securities, the preemptive right to
purchase all or part of such Investor's PRO RATA share of New Securities (as
defined in Section 2.2) which the Company, from time to time, proposes to sell
and issue to any Person (each an "Additional Investor). The Investor shall be
entitled to apportion the preemptive rights hereby granted it among itself and
its partners and affiliates in such proportions as it deems appropriate.
2.2. DEFINITION OF NEW SECURITIES. "New Securities" shall mean any capital
stock of the Company or rights thereto, whether now authorized or not, and
options, warrants or other rights to purchase capital stock and securities of
any type whatsoever that are, or may become, convertible into capital stock;
provided, however, that "New Securities" does not include (i) securities
issuable upon conversion of or with respect to Series A Preferred Stock; (ii)
securities issuable upon exercise of the Warrant; (iii) securities issued in
connection with a bona fide business acquisition of or by the Company, whether
by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, including but not limited to shares of Common Stock issued in
connection with the Company's acquisition of Guideline Research Corporation
("Guideline"), but excluding in all cases any shares of Common Stock issued by
the Company in connection with any indemnity obligations of the Company pursuant
to any acquisition agreement; (iv) an aggregate of not more than 3,500,000
shares (subject to appropriate adjustment for stock splits, stock dividends,
reclassifications, recapitalizations or similar events), of the Company's Common
Stock (or related options to purchase Common Stock) which are issued to
employees, directors or consultants of the Company or any subsidiary pursuant to
the Company's 1996 Stock Option Plan (the "Stock Plan") or any similar stock
option or incentive plan approved by a majority of the Company's Board of
Directors and, as required, shareholders, provided the issuance of such shares
of the Company's Common Stock (or related options to purchase Common Stock) is
approved by the Board of Directors or a duly-appointed committee thereof; (v)
securities issuable upon conversion or exercise of any options, warrants or
other rights to acquire capital stock of the Company outstanding as of the date
of this Agreement; and (vi) shares of the Company's capital stock issued in
connection with any stock split, stock dividend, reclassification or
recapitalization by the Company.
2.3. NOTICE FROM THE COMPANY. In the event the Company proposes to
undertake an issuance of New Securities, it shall give the Investor written
notice of its intention, describing the type of New Securities and the price and
the terms upon which the Company proposes to issue the same. Such Investor shall
have thirty (30) days from the date any such notice is given to agree to
purchase up to its PRO RATA share of such New Securities for the price and upon
the terms specified in the notice by giving written notice to the Company and
stating therein the quantity of New Securities to be purchased. A PRO RATA
share, for purposes of this Section 2, is the ratio of the number of shares of
Common Stock issued and held, including shares issuable upon conversion of the
Series A Preferred Stock and/or upon exercise of the Warrant then held, by such
Investor to the total number of shares of Common Stock of the Company then
outstanding on an as converted and fully diluted basis (excluding shares
reserved for option grants not yet granted).
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2.4. SALE BY THE COMPANY. In the event the Investor fails to exercise in
full its preemptive rights the Company shall have ninety (90) days thereafter to
sell the New Securities with respect to which the Investor's preemptive rights
were not exercised, at a price and upon terms no more favorable to the
Additional Investor thereof than specified in the Company's original notice to
the Investor. To the extent the Company does not sell all the New Securities
offered within said ninety (90) day period, the Company shall not issue or sell
such New Securities without first again offering such securities in the manner
provided by this Section 2.
2.5. TERMINATION OF RIGHTS. The rights granted under this Section 2 will
terminate at such time as the Loan is fully repaid and the Investor no longer
holds any Registrable Securities.
3. CO-SALE RIGHTS.
3.1. CO-SALE RIGHT. Subject to the terms and conditions of Section 3.5 and
3.6 hereof, none of the Major Shareholders or any of their respective affiliates
other than the Company (each a "Selling Shareholder") shall enter into any
transaction that would result in the sale by him of any capital stock now or
hereafter owned by the Major Shareholders or any of their respective affiliates,
unless at least thirty (30) calendar days prior to the closing of such sale the
Selling Shareholder shall give notice to each Holder of its intention to effect
such sale in order that such Holder may exercise its rights under this Section 3
as hereinafter described. Such notice shall set forth (i) the number of shares
to be sold by the Selling Shareholder, (ii) the principal terms of the sale,
including the price at which the shares are intended to be sold, and (iii) an
offer by the Selling Shareholder to cause to be included with the shares to be
sold by it in the sale such Holder's Pro Rata Share on the same terms and
conditions. For purposes of this Section 3, a Holder's "Pro Rata Share" will be
defined as a fraction, the numerator of which is the number of Registrable
Securities held by such Holder, and the denominator of which is the sum of (i)
the number of shares of capital stock owned by the Selling Shareholder plus (ii)
the number of Registrable Securities held by such Holder.
3.2. REJECTION OF CO-SALE OFFER. If such Holder has not accepted such
offer in writing within a period of fifteen (15) calendar days from the date of
receipt of the notice specified in subsection (a) of this Section, then the
Selling Shareholder shall thereafter be free for a period of ninety (90) days to
sell the number of shares specified in such notice, at a price no greater than
the price set forth in such notice and on otherwise no more favorable terms to
the Selling Shareholder than as set forth in such notice, without any further
obligation to such Holder in connection with such sale. In the event that the
Selling Shareholder fails to consummate such sale within such ninety-day period,
the shares specified in such notice shall continue to be subject to this Section
3.
3.3. ACCEPTANCE OF CO-SALE OFFER. If such Holder accepts such offer in
writing within a period of fifteen (15) calendar days from the date of receipt
of the notice specified in Section 3.1, such acceptance shall be irrevocable
unless the Selling Shareholder shall be unable to cause to be included in the
sale the number of Registrable Securities held by such Holder and set forth in
the written acceptance.
14
3.4. DELIVERY REQUIREMENTS. Such Holder shall effect its participation in
the Selling Shareholder's sale by either promptly (i) delivering to the Selling
Shareholder the appropriate number of shares of Common Stock which such Holder
has elected to sell, or (ii) to the extent such Holder does not hold any shares
of Common Stock, exercising the Warrant and/or converting shares of Series A
Preferred Stock, as case may be, for the appropriate number of shares of Common
Stock and then delivering to the Selling Shareholder for transfer to the
prospective purchaser, one or more certificates, properly endorsed for transfer,
which represent that number of shares of Common Stock which such Holder has
elected to sell. The Company agrees to effect any such exercise and/or
conversion concurrent with the actual transfer of the Selling Shareholder's
shares to the purchaser.
3.5. EXEMPT TRANSFERS OF STOCK. Notwithstanding anything to the contrary
contained herein, the terms and conditions of this Section 3 shall not apply to
the following transfers:
(a) any transfers of Common Stock by gift during Major Shareholder's
lifetime or on a Major Shareholder's death by will or intestacy to (i) Major
Shareholder's "immediate family" (as defined below), (ii) a trust for the
benefit of such Major Shareholder or such Major Shareholder's immediate family,
or (iii) a partnership controlled, either directly or indirectly, by such Major
Shareholder, provided that each transferee or other recipient executes a
counterpart copy of this Agreement and becomes bound by the terms and conditions
of this Section 3 (as a "Selling Shareholder") hereof; for purposes of this
Section 3.5, the term "immediate family" means such Major Shareholder's spouse,
lineal descendant or antecedent (whether natural or adopted), brother or sister;
(b) any transfers of Common Stock by a Major Shareholder made (i)
pursuant to a statutory merger or statutory consolidation of the Company with or
into another corporation or corporations; or (ii) pursuant to the winding up and
dissolution of the Company;
(c) any transfers of Common Stock to the Company pursuant to any
right of repurchase by the Company;
(d) any transfers by a Major Shareholder to a shareholder or partner
of a Major Shareholder or to the estate of any such shareholder or partner;
(e) with respect to Xxxxx, any transfers or sales by Xxxxx of the
Common Stock that he was required to purchase pursuant to Section 2.6 of the
Stock Purchase Agreement by and among Xxx L Xxxxxxxxx, Xxxxxx La Terra,
Guideline and the Company, dated of even date herewith.
(f) with respect to Xxxxx, any transfers or sales by Xxxxx of not
more than 10% of the total shares of Common Stock held by such Major Shareholder
as of the date hereof per annum (excluding any shares of Common Stock sold or
transferred pursuant to Section 3.5(e)); provided, however, that the total
number of shares of Common Stock sold or transferred by a Major Shareholder
pursuant to this Section 3.5(f) shall not exceed 350,000 shares in the aggregate
(excluding any shares of Common Stock sold or transferred pursuant to Section
3.5(e)).
15
(g) with respect to Franklin, any transfers or sales by Franklin of
not more than 20% of the total shares of Common Stock held by Franklin as of the
date hereof per annum.
3.6. TERMINATION OF CO SALE RIGHTS WITH RESPECT TO FRANKLIN.
Notwithstanding anything herein to the contrary, with respect to Franklin only,
the terms and conditions set forth in this Section 3 shall terminate at such
time as the Investor has sold more than thirty-seven and one-half percent (37
1/2%) of the Registrable Securities held by the Investor.
4. OTHER COVENANTS OF THE COMPANY.
4.1. KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall keep, and
cause each subsidiary to keep, adequate records and books of account, in which
complete entries will be made in accordance with generally accepted accounting
principles consistently applied, reflecting all financial transactions of the
Company and its subsidiaries and in which, for each fiscal year, all reserves
for depreciation, depletion, obsolescence, amortization, taxes, bad debts, and
other purposes in connection with its business shall be made.
4.2. INFORMATION RIGHTS.
(a) For so long as the Company is subject to the requirements of the
Exchange Act, the Company shall furnish to the Investor as soon as practicable,
but in any event within thirty (30) days after the end of each month in each
fiscal year (other than the last month in each fiscal year), a consolidated and
combined balance sheet of the Company and its subsidiaries and the related
consolidated and combined statements of operations, shareholders' equity, and
cash flows, unaudited but prepared in accordance with generally accepted
accounting principles consistently applied, except for the absence of notes, and
certified by the Chief Financial Officer of the Company, such consolidated and
combined balance sheet to be as of the end of such month and such consolidated
and combined statements of operations, shareholders' equity, and cash flows to
be for such month in each case with comparative statements for (i) the prior
fiscal year and (ii) the current budget approved by the Board of Directors.
(b) Upon the Company no longer being subject to the reporting
requirements of the Exchange Act, the Company shall furnish to the Investor the
following information:
(i) as soon as practicable, but in any event within one
hundred twenty (120) days after the end of each fiscal year of the Company, a
consolidated and combined balance sheet of the Company and its subsidiaries as
of the end of such fiscal year and the related consolidated and combined
statements of operations, shareholders' equity, and cash flows for the fiscal
year then ended, such financial reports to be in reasonable detail, prepared in
accordance with generally accepted accounting principles consistently applied
and audited by a firm of independent public accountants reasonably acceptable to
the Investor, and any management letters or special reports by auditors and any
responses thereto;
(ii) as soon as practicable, but in any event within
forty-five (45) days after the end of each fiscal quarter in each year (other
than the last quarter in each fiscal year), a
16
consolidated and combined balance sheet of the Company and its subsidiaries and
the related consolidated and combined statements of operations, shareholders'
equity, and cash flows, unaudited but prepared in accordance with generally
accepted accounting principles consistently applied, except for the absence of
notes, and certified by the Chief Financial Officer of the Company, such
consolidated and combined balance sheet to be as of the end of such quarter and
such consolidated and combined statements of operations, shareholders' equity,
and cash flows to be for such quarter and for the period from the beginning of
the fiscal year to the end of such quarter, in each case with comparative
statements for (i) the prior fiscal year and (ii) the current budget approved by
the Board of Directors;
(iii) as soon as practicable, but in any event within thirty
(30) days after the end of each month in each fiscal year (other than the last
month in each fiscal year), a consolidated and combined balance sheet of the
Company and its subsidiaries and the related consolidated and combined
statements of operations, shareholders' equity, and cash flows, unaudited but
prepared in accordance with generally accepted accounting principles
consistently applied, except for the absence of notes, and certified by the
Chief Financial Officer of the Company, such consolidated and combined balance
sheet to be as of the end of such month and such consolidated and combined
statements of operations, shareholders' equity, and cash flows to be for such
month in each case with comparative statements for (i) the prior fiscal year and
(ii) the current budget approved by the Board of Directors.
(iv) as soon as practicable, but in any event no later than
thirty (30) days after the start of each fiscal year, consolidated capital and
operating expense budgets (each, an "Annual Budget"), cash flow projections, and
income and loss projections for the Company and its subsidiaries and divisions
in respect of such fiscal year and approved by the Board of Directors, all
itemized in reasonable detail and prepared on a monthly basis and, promptly
after preparation, any material revisions to any of the foregoing approved by
the Board of Directors;
(v) as soon as practicable, but in any event no later than
thirty (30) days after each fiscal quarter in each year, a compliance
certificate signed by the Chief Executive Officer or Chief Financial Officer of
the Company, certifying that the Company is in compliance with all of the terms
and provisions of this Agreement, the Purchase Agreement and all of the
agreements entered into by the Company in connection with the Loan; and
(vi) promptly, from time to time, such other information
regarding the business, prospects, financial condition, operations, property, or
affairs of the Company and/or its subsidiaries, as such Investor reasonably may
request including, without limitation, an accounting of the use of the proceeds
from the sale of the Series A Preferred Stock and the Loan.
4.3. INSPECTION, CONSULTATION, AND ADVICE. The Company shall permit and
cause each of the subsidiaries to permit the Investor and such attorneys and/or
accountants as it may designate, at such Investor's expense, to visit and
inspect during business hours any of the properties of the Company and the
subsidiaries, examine their books and take copies and extracts therefrom,
discuss the affairs, finances, and accounts of the Company and the subsidiaries
with their officers, employees, and public accountants (and the Company hereby
authorizes said accountants to discuss with such Investor and such designees
such affairs, finances, and
17
accounts), and consult with and advise the management of the Company and the
subsidiaries as to their affairs, finances, and accounts, all at reasonable
times and upon reasonable notice; provided, however, that nothing in this
Section shall be construed to require the Company or its management to follow
any such consultation and advice
4.4. COMPLIANCE WITH LAWS. The Company shall comply, and cause each
subsidiary to comply, with all applicable laws, noncompliance with which could
reasonably be expected to have a material adverse effect on the business,
operations or prospects of the Company.
4.5. COMPLIANCE WITH TERMS OF INDEBTEDNESS. The Company and its
subsidiaries will comply in all material respects with all terms and covenants
of all material debt obligations of the Company and the subsidiaries, including
without limitation the Loan, as the same may be amended from time to time.
4.6. OBSERVATION RIGHTS. For so long as the Loan is outstanding or the
Investor holds any shares of Series A Preferred Stock, the Investor shall
receive notice of and be entitled to attend or may send a representative to
attend all meetings of the Company's Board of Directors in a non-voting
observation capacity and shall receive a copy of all correspondence and
information delivered to the Company's Board of Directors; provided, however,
that the Investor, or its representative, shall agree to hold in confidence and
trust and to act in a fiduciary manner with respect to all information so
provided.
5. GENERAL PROVISIONS
5.1. SPECIFIC ENFORCEMENT. The Company expressly agrees that the Investor
may be irreparably damaged if this Agreement is not specifically enforced. Upon
a breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by the Company, the Investor shall, in addition to all other remedies,
be entitled to apply for a temporary or permanent injunction, and/or a decree
for specific performance, in accordance with the provisions hereof.
5.2. AMENDMENTS AND WAIVERS. Except as otherwise provided herein, any term
of this Agreement may be amended and the observance of any term of this
Agreement 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 of a majority of the outstanding shares of Registrable
Securities; provided, however, that Section 3 may only be amended with the
consent of the Company, the holders of a majority of the outstanding shares of
Registrable Securities and the holders of a majority of the outstanding shares
of Common Stock held by the Major Shareholders. Any amendment or waiver effected
in accordance with this Section shall be binding upon any Person who is granted
certain rights under this Agreement and the Company.
5.3. EXPENSES. If any action at law or in equity is commenced to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees and disbursements in addition to any other relief
to which such party may be entitled.
5.4. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective
18
successors and assigns of the parties (including transferees of any shares of
Registrable Securities). Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
5.5. NOTICES. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given: (i) upon personal delivery to the party to be notified; (ii) when sent by
confirmed facsimile if sent during normal business hours of the recipient, if
not, then on the next business day; (iii) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (iv)
one day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications
shall be sent to the address noted below, or at such other address as such party
may designate by ten (10) days' advance written notice to the Company (who shall
provide such other address to the Investor upon request):
(a) if to the Company or any Major Shareholder, at 625 Avenue of the
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxx Xxxxx, with a copy to
Xxxx Xxxxxxx, P.C., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn:
Xxxxxx X. Xxxxxxxx;
(b) if to Franklin, at 000 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx X-000, Xxx,
Xxx Xxxx, 00000; and
(c) if to the Investor, at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000, Attn: Xxxxxx X. X'Xxxxx III, with a copy to Bass, Xxxxx &
Xxxx PLC, 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, Attn:
Xxxxxx X. Xxxxx III, facsimile (000) 000-0000.
5.6. GOVERNING LAW. This Agreement, and any dispute, controversy or claim
arising out of or relating to this Agreement or a breach thereof, shall be
governed by, and construed in accordance with, the laws of the State of New
York.
5.7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes any and all
prior agreements of the parties with respect to the subject matter hereof.
5.8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by facsimile or
by electronic transmission of an executed counterpart of any signature page to
this Agreement to be executed hereunder shall have the same effectiveness as the
delivery of a manually executed counterpart thereof.
5.9. SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and
19
the balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
5.10. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.
5.11. AGGREGATION OF STOCK. All Registrable Securities held or acquired by
affiliated Persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
20
IN WITNESS WHEREOF, the Company, the Major Shareholders and the Investor
have executed this Investor's Rights Agreement as of the day and year first
above written.
FIND/SVP, INC.
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
PETRA MEZZANINE FUND, L.P.
By: Petra Partners, LLC, its General Partner
By: /s/ Xxxxxx X. X'Xxxxx III
----------------------------------------
Name: Xxxxxx X. X'Xxxxx III
Title: Managing Member
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx Xxxxx
--------------------------------------------
Xxxxx Xxxxx
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