EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of October
6, 2000, by and between Juno Online Services, Inc., a Delaware corporation, with
offices located at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"COMPANY"), and Westgate International, L.P., a Cayman Islands limited
partnership with offices located at c/o HSBC Financial Services (Cayman)
Limited, P.O. Box 1109, Xxxx Street, Grand Cayman, Cayman Islands, BWI (the
"PURCHASER").
WHEREAS:
A. In connection with the Common Stock Investment Agreement by and
between the Company and the Purchaser of even date herewith (the "INVESTMENT
AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions of the Investment Agreement, to issue and sell to the Purchaser
certain shares of the Company's common stock, par value $0.01 per share (the
"COMMON STOCK"), pursuant to an effective Registration Statement (as defined
below);
B. The Company has agreed to file a registration statement on Form S-3
with the Securities and Exchange Commission (the "SEC") in compliance with the
1933 Act (as defined below) and Rule 415 thereunder; and
C. To induce the Purchaser to execute and deliver the Investment
Agreement, the Company has agreed to provide certain rights with respect to the
Registration Statement under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "1933 ACT"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "EFFECTIVE PERIOD" means the period beginning on a Drawdown Notice
Start Date and ending 5 Trading Days following the later of (i) the final
Purchase Day of the Purchase Period to which such Drawdown Notice Start Date
relates, and (ii) the final Closing with respect to the Purchase Period to which
such Drawdown Notice Start Date relates.
(b) "HOLDER" means the Purchaser and any transferee or assignee thereof
to whom the Purchaser assigns its rights under this Agreement in a transfer or
assignment permitted in this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section 8 and any nondisclosure
agreements reasonably requested by the Company
regarding this Agreement.
(c) "INSPECTORS" mean the attorneys, accountants and all other agents
and Persons retained by or designated by the Purchaser (who may or may not be
affiliated with the Purchaser) to assist with the Purchaser's initial and
ongoing due diligence review of the Company and its businesses.
(d) "1934 ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(e) "PERSON" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
(f) "REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous basis ("RULE
415"), and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.
(g) "REGISTRABLE SECURITIES" means (i) the shares of Common Stock
issued or issuable pursuant to the Investment Agreement; (ii) securities issued
or issuable upon any stock split, reverse stock split, stock dividend,
recapitalization, exchange or similar event or otherwise with respect to such
shares of Common Stock; and (iii) any other security issued as a dividend or
other distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses; in each case regardless of any
limitation on the Purchaser's right or obligation to purchase the maximum number
of shares of Common Stock provided for under the Investment Agreement.
(h) "REGISTRATION STATEMENT" shall mean a registration statement to be
filed by the Company with the SEC pursuant to Rule 415 under the 1933 Act on
Form S-3 (or if such form is not then available to the Company, on Form S-1 or
Form S-2) under the 1933 Act covering the sale of the Registrable Securities.
(i) Capitalized terms used but not defined herein shall have the
meanings specified in the Investment Agreement.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company represents, warrants and
covenants to the Purchaser that it will file a Registration Statement on Form
S-3 with the SEC in compliance with the 1933 Act covering the sale by the
Purchaser of the Registrable Securities, no later than 45 days following the
date of this Agreement; PROVIDED, however, that the Company may delay the filing
of the Registration Statement for not longer than 30 days following such 45th
day if the Company's Board of Directors determines that it is in the best
interests of the Company to do so,
and the Company promptly notifies the Purchaser of such determination.
Notwithstanding the immediately preceding sentence, any such delay shall not
affect or extend (i) the number of days in which the Company has agreed under
the Investment Agreement to use its best efforts to cause the Registration
Statement to become effective or (ii) the Purchaser's right to terminate the
Investment Agreement pursuant to Section 8 thereof. Notwithstanding anything
herein to the contrary, the Company shall not be required on any single
Registration Statement to register more than 3,000,000 shares of Common Stock
(or, if less, the greatest number of shares of Common Stock that the Company is
then permitted to register pursuant to the 1933 Act and the rules and
regulations promulgated thereunder).
(b) COUNSEL. In connection with any offering of the Registrable
Securities pursuant to the Registration Statement, the Holders shall have the
right to select Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C. or such other legal
counsel as is reasonably satisfactory to the Company to administer their
interest in the offering. The Company agrees to fully cooperate with the
reasonable requests of such counsel.
3. RELATED OBLIGATIONS.
At all times that the Company is obligated to maintain the Registration
Statement effective, the Company will use its best efforts to effect the
registration of the Registrable Securities in accordance with the Purchaser's
stated method of disposition thereof (as identified to the Company by the
Purchaser in writing) and, pursuant thereto, the Company shall have the
following obligations:
(a) The Company shall (except as contemplated by Section 3(d) below)
keep the Registration Statement (covering all Registrable Securities registered
thereon) effective pursuant to Rule 415 and the prospectus current and
deliverable at all times during each Effective Period (the Effective Periods
being referred to collectively, as the "REGISTRATION PERIOD"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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, in light of the circumstances in which
they were made, not misleading.
(b) The Company shall (except as contemplated by Section 3(d) below)
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement (on Form S-3 under the
1933 Act, or if such form is not then available to the Company, on Form S-1 or
Form S-2 under the 0000 Xxx) and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, shall comply with the provisions of the 1933 Act with respect to
the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of as set forth in such Registration Statement.
(c) The Company shall furnish to the Purchaser and its legal counsel
without charge promptly after the same is prepared and filed with the SEC such
number of copies as the
Purchaser may reasonably request of such Registration Statement and any
amendments and supplements thereto, including financial statements and
schedules, and the prospectus included in such Registration Statement (including
each prospectus supplement) and, with regard to such Registration Statements,
shall furnish to the Purchaser any correspondence by or on behalf of the Company
to the SEC or the staff of the SEC and any correspondence from the SEC or the
staff of the SEC to the Company or its representatives and copies of any final
prospectus and supplements thereto.
(d) The Company shall notify (subject to Section 3(i)(ii)) the
Purchaser by telephone and in writing that the prospectus included in a
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, in light of the circumstances under
which they were made, not misleading, immediately after becoming aware of the
existence of such circumstances. The Purchaser shall immediately cease making
any additional offers or sales of Shares purchased from the Company pursuant to
the Investment Agreement upon the Purchaser's receipt of such notification from
the Company. Thereafter, the Company shall either:
(A) promptly prepare a supplement or amendment to such Registration
Statement (which, if such Registration Statement is on Form S-3,
may consist of a document to be filed by the Company with the SEC
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and
to be incorporated by reference in the prospectus) to correct
such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to the Purchaser (or such other
number of copies as the Purchaser may reasonably request),
(B) immediately notify the Purchaser in writing and by telephone that
the Company does not intend to prepare such a supplement or
amendment to the Registration Statement at the current time due
to the existence of pending strategic negotiations (such notice
being referred to herein as a "SUSPENSION NOTICE"). Upon the
Company's delivery of a Suspension Notice to the Purchaser, the
Company's rights and obligations to sell Shares to the Purchaser
and the Purchaser's obligation to buy Shares from the Company
shall each be suspended until such time as (i) the Company files
a supplement or amendment to the Registration Statement in
accordance with clause (A) above, or (ii) the filing of such
supplement or amendment is no longer necessary to render the
Registration Statement and prospectus current and deliverable
(the period beginning upon the delivery of a Suspension Notice
and ending upon the satisfaction of clause (i) or (ii) above
being a "SUSPENSION PERIOD"), or
(C) immediately notify the Purchaser in writing and by telephone that
the Company does not intend to prepare such a supplement or
amendment to the Registration Statement at the current time for
any reason other than as stated in clause (B) above (such notice
being referred to herein as a "NON-
EFFECTIVENESS NOTICE"). Upon delivery of a Non-Effectiveness
Notice to the Purchaser, the Company's rights and obligations to
sell Shares to the Purchaser and the Purchaser's obligation to
buy Shares from the Company shall each be suspended until such
time as the Company satisfies either clause B(i) or B(ii) above
(the period beginning upon the delivery of a Non-Effectiveness
Notice and ending upon the satisfaction of clause B(i) or B(ii)
above being a "NON-EFFECTIVENESS PERIOD").
If a Suspension Notice or a Non-Effectiveness Notice is delivered by
the Company to the Purchaser during an existing Purchase Period, that Purchase
Period shall immediately terminate. The Company's obligation to deliver to the
Purchaser any Shares previously purchased by the Purchaser pursuant to the
Investment Agreement with respect to which there has not been a Closing shall
not be affected or relieved in any way as a result of this Section 3(d).
(e) The Company shall immediately notify (subject to Section 3(i)(ii)
below) the Purchaser in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification of
such effectiveness shall be delivered to the Purchaser by facsimile on the same
day of such effectiveness and by overnight mail), and (ii) of any request by the
SEC for amendments or supplements to a Registration Statement or related
prospectus or related information.
(f) The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, use its
best efforts to promptly obtain the withdrawal of such order or suspension and
to immediately notify (subject to Section 3(i)(ii) below) the Purchaser by
telephone and in writing of the issuance of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.
(g) Subject to Section 3(i)(ii) below, the Company shall permit the
Purchaser and/or Purchaser's counsel, to review and comment upon the
Registration Statement and all amendments and prospectus supplements thereto for
a reasonable period of time prior to their filing with the SEC, and not file any
of the preceding documents in a form to which such counsel reasonably objects or
containing any disclosure information to which such counsel objects in good
faith.
(h) Subject to Section 3(i)(ii) below, the Company shall make available
for inspection by the Purchaser and its Inspectors all pertinent financial and
other records, and pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which the Purchaser or Inspector may reasonably request. The
Purchaser agrees (to the extent it has approved receipt of nonpublic information
pursuant to Section 3(i)(ii) below or has received nonpublic information from
its Inspectors) to keep
confidential (and to cause its Inspectors and counsel to keep confidential) all
nonpublic information and Records received directly from the Company or through
the Purchaser's Inspectors or counsel which the Company determines to be
confidential, and of which determination the Purchaser and Inspectors are so
notified, unless: (A) the release of such information is sought pursuant to a
legal process, including without limitation, subpoena, interrogatory, request
for documents or information, civil investigative demand, deposition or similar
process, or a court of competent jurisdiction or by a governmental,
quasi-governmental, regulatory or administrative entity, PROVIDED that the
Purchaser shall immediately notify the Company of the existence, terms and
circumstances of such request, and the Purchaser shall reasonably cooperate with
the Company in attempting to (x) prevent or limit such disclosure and (y) obtain
confidential treatment of any information required to be disclosed, or (B) such
information has been made generally available to the public other than by
disclosure in violation of the Purchaser's obligations under the Transaction
Documents or any other agreement or otherwise. The Purchaser agrees that it
shall, upon learning that disclosure of such information concerning the Company
is sought in or by a court or governmental body of competent jurisdiction or
through other means pursuant to clause (A) above, give prompt written notice to
the Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
(i) DUE DILIGENCE REVIEW.
(i) Subject to Section 3(i)(ii) below, the Company shall make
available, during normal business hours, for inspection and review by the
Purchaser and its Inspectors, all financial and other records, all SEC Documents
and other filings with the SEC, and all other corporate documents and properties
of the Company as the Purchaser may request for the purpose of such review in
its good faith belief that such items are necessary for such review, and cause
the Company's officers, directors and employees to promptly supply all such
information requested by the Purchaser or its Inspectors in connection with such
Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Purchaser and its
Inspectors and their respective accountants and attorneys to conduct initial and
ongoing due diligence with respect to the Company and the accuracy of the
Registration Statement.
(ii) Notwithstanding any other provision of any of the
Transaction Documents, the Company shall not disclose nonpublic information to
the Purchaser or its Inspectors unless prior to disclosure of such information
the Company identifies such information as being nonpublic information (without
conveying the substance of such nonpublic information) and provides the
Purchaser and its Inspectors with the opportunity to accept or refuse to accept
such nonpublic information for review. If the Purchaser accepts such nonpublic
information, the Company will provide such information only to the Inspector
designated by the Purchaser. Nothing in the Transaction Documents shall entitle
the Company to withhold nonpublic information accepted pursuant to this Section
3(i)(ii).
(iii) Subject to Section 3(i)(ii) above, the Company will
immediately
notify the Inspectors of any event or the existence of any circumstance of which
it becomes aware, constituting nonpublic information (whether or not requested
of the Company specifically or generally during the course of due diligence or
otherwise by any such persons or entities), which, if not disclosed in the
prospectus included in the Registration Statement, would cause such prospectus
to include a material misstatement or to omit a material fact required to be
stated therein in order to make the statements therein, in light of the
circumstances in which they were made, not misleading. In no event shall the
Purchaser's Inspectors receiving nonpublic information pursuant to Section
3(i)(ii) above disclose to the Purchaser the nature of the specific event or
circumstances constituting any nonpublic information discovered by such advisors
or representatives in the course of their due diligence without the written
consent of the Purchaser prior to disclosure of such information. The
Purchaser's Inspectors shall make complete disclosure to the Purchaser's
independent counsel of all events or circumstances constituting nonpublic
information discovered by such Inspectors in the course of their due diligence
upon which such Inspectors form the opinion that the Registration Statement
contains an untrue statement of a material fact or omits a material fact
required to be stated in the Registration Statement or necessary to make the
statements contained therein, in the light of the circumstances in which they
were made, not misleading. Upon receipt of such disclosure, the Purchaser's
independent counsel shall consult with the Company's independent counsel (who,
for all purposes of this Agreement, must be either Xxxxxxx, Phleger & Xxxxxxxx
LLP or another independent law firm with substantial experience in underwritten
offerings which is reasonably acceptable to the Purchaser) in order to address
the concern raised as to the existence of a material misstatement or omission
and to discuss appropriate disclosure with respect thereto.
(j) Without limiting the Company's obligations under the Investment
Agreement, the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Holders may reasonably request and Registrable in
such names of the Persons as the Holders may request.
(k) If requested by Holders holding 50% or more of all outstanding
Registrable Securities then held by Holders, the Company shall (i) as soon as
practical incorporate in a prospectus supplement or post-effective amendment
such information as such Holders reasonably determine should be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the offering of the Registrable
Securities to be sold in such offering; and (ii) make all required filings of
such prospectus supplement or post-effective amendment as soon as reasonably
possible after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment.
(l) The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other federal and state governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
(m) The Company shall make generally available to its security holders
as soon as practical, an earnings statement of the Company which will satisfy
the provisions of Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act.
(n) The Company shall comply with all applicable rules and regulations
of the SEC and any other regulatory authorities of competent jurisdiction in
connection with any registration hereunder.
(o) Immediately after the Registration Statement is declared effective
the Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to
the Holders whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as EXHIBIT A.
(p) The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless and except to the
extent that (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is sought pursuant to a legal
process, including without limitation, subpoena, interrogatory, request for
documents or information, civil investigative demand, deposition or similar
process, or a court of competent jurisdiction or by a governmental,
quasi-governmental, regulatory or administrative entity, PROVIDED that the
Company shall immediately notify such Holder of the existence, terms and
circumstances of such request, and the Company shall reasonably cooperate with
such Holder in attempting to (a) prevent or limit such disclosure and (b) obtain
confidential treatment of any information required to be disclosed, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of the Company's obligations under the Transaction
Documents or any other agreement or otherwise. The Company agrees that it shall,
upon learning that disclosure of such information concerning a Holder is sought
in or by a court or governmental body of competent jurisdiction or through other
means pursuant to (iii) above, give prompt written notice to such Holder and
allow such Holder, at the Holder's expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such information.
(q) The Company shall engage a transfer agent and registrar for all the
Registrable Securities not later than the effective date of the first
Registration Statement filed pursuant hereto.
4. OBLIGATIONS OF THE HOLDERS.
(a) Each Holder agrees that, upon receipt of any written notice from
the Company of the happening of any event of the kind described in Sections 3(d)
and (f), such Holder will immediately discontinue (i) the disposition of
Registrable Securities pursuant to any prospectus in the Registration
Statement(s) covering such Registrable Securities and (ii) the purchase of
Shares from the Company, with regard to both clauses (i) and (ii) above, until
such Holder's receipt of the copies of a supplemented or amended prospectus as
contemplated by Section 3(d) above.
(b) The Purchaser and each other Holder shall cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Purchaser or Holder and the proposed
manner of sale of the Registrable Securities required to be disclosed in the
Registration Statement) and executing and returning all documents reasonably
requested in connection with the registration and sale of the Registrable
Securities. The Purchaser hereby consents to be named as an underwriter in the
Registration Statement. The Purchaser acknowledges that in accordance with
current SEC policy, the Purchaser will be named as the underwriter of the
Registrable Securities in the Registration Statement.
(c) The Purchaser agrees to prepare and provide to the Company in
writing a plan of distribution section for inclusion in the Registration
Statement, and not to distribute any Shares purchased from the Company pursuant
to the Investment Agreement other than in accordance with such plan of
distribution. The Company agrees to include the Purchaser's plan of distribution
in the Registration Statement.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualification fees, printers, and accounting fees, and
fees and disbursements of counsel for the Company and reasonable fees and
disbursements of counsel for the Holders (such fees and disbursements of counsel
for the Holders to be subject to the limitations contained in the Investment
Agreement) shall be paid by the Company.
6. INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Holder, the directors,
officers, partners, employees, members, agents, representatives of, and each
Person, if any, who controls, any Holder within the meaning of the 1933 Act or
the 1934 Act (each, an "INDEMNIFIED PERSON"), from and against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
attorneys' fees and disbursements, amounts paid in settlement or expenses, joint
or several, (collectively, "CLAIMS") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto ("INDEMNIFIED
DAMAGES"), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other "blue sky" laws of any jurisdiction
in which Registrable Securities are offered, or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which the statements therein were made, not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being, collectively,
"VIOLATIONS"), or (iv) enforcement of this indemnification. The Company shall
reimburse the Holders and each such controlling Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees and
disbursements or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim to the extent arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person
expressly for inclusion in the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made available by
the Company pursuant to Section 3(c); (ii) shall not be available to the extent
such Claim is based on (a) a failure of the Holder to deliver or to cause to be
delivered the current prospectus made available by the Company or (b) the
Indemnified Person's use of an incorrect prospectus despite being promptly
advised in advance by the Company in writing not to use such incorrect
prospectus; and (iii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld, delayed or conditioned. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Holders pursuant to Section 8.
(b) In connection with any Registration Statement in which a Holder is
participating, each such Holder agrees, severally and not jointly, to indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "INDEMNIFIED PARTY"), against any Claim
or Indemnified Damages to which any of them may become subject, under the 1933
Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages
arise out of or are based upon any Violation, in each case to the extent, and
only to the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for inclusion in such Registration Statement; and, subject to Section
6(c), such Holder will reimburse the reasonably incurred legal expenses of one
counsel or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such
Holder, which consent shall not be unreasonably withheld, delayed or
conditioned; provided, further, however, that the Holder shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities under such Registration Statement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Holders pursuant to Section 8. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement or threat of
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
thereof, and the indemnifying party shall have the right to participate in, and,
jointly with any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel reasonably satisfactory to the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses thereof to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The indemnifying
party shall pay for only one separate legal counsel for the Indemnified Persons
or the Indemnified Parties, as applicable, and such counsel shall be selected by
the Purchaser, if the Holders are entitled to indemnification hereunder, or the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
Claim by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or Indemnified Person
which relates to such Claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its written consent; provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the consent of the Indemnified Party or
Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such Claim.
Following indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice
to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
(d) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law or otherwise, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law or
otherwise; provided, however, that: (i) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of fraudulent misrepresentation; and
(iii) contribution by any Holder shall be limited in amount to the net amount of
proceeds received by such Holder from the sale of such Registrable Securities
under such Registration Statement.
8. ASSIGNMENT OF REGISTRATION RIGHTS.
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the parties, including any Permitted Assignee
(as defined below). The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Purchaser,
including by merger or consolidation. The Purchaser may assign some or all of
its rights hereunder to an Affiliate of the Purchaser, without the consent of
the Company, and to others, with the written consent of the Company (in each
case, a "PERMITTED ASSIGNEE"); provided, however, that each such assignee shall
be required to confirm in writing its agreement to be bound by the terms of this
Agreement, and provided further, that any such assignment shall not release the
Purchaser from its obligations hereunder unless such obligations are assumed by
such assignee. Notwithstanding anything to the contrary contained in the
Transaction Documents, the Purchaser shall be entitled to pledge the Shares in
connection with a bona fide margin account.
9. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Holders holding
50% or more of all outstanding Registrable Securities then held by Holders. Any
amendment or waiver effected in accordance with this Section 9 shall be binding
upon each Holder and the Company.
10. MISCELLANEOUS.
(a) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement (which must be given
subject to Section 3(h)(ii)) must be in writing, must be delivered by (i) a
nationally recognized delivery service, mail or hand delivery OR (ii) facsimile,
and will be deemed to have been delivered upon receipt. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Juno Online Services, Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 212-597-9200
Attention: Mr. Xxxxxxx Xxxxx
President and Chief Executive Officer
E-Mail: xxxxxxxx-xxxxxx-xxxx@xxxxx.xxxx.xxx
WITH A COPY TO:
Xxxxxxx Phleger & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
E-Mail: xxxxxxxxx@xxxxxxx.xxx
If to the Purchaser:
Westgate International, L.P.
c/x Xxxxxxx International Capital Advisors, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Mr. Xxxxx Xxxxx
E-Mail: XXXXXX@XXXXXXX-XXXXX.XXX
WITH A COPY TO:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 212-986-8866
Attention: Xxxxxxx X. Xxxxxxx
E-Mail: xxxxxxxx@xxxx.xxx
Each party shall provide five (5) days prior written notice to the
other party in accordance with this Section 10 of any change in its address,
telephone number or facsimile number. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i) or (ii) above, respectively.
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICT OF LAWS. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF NEW YORK,
CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY
OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. IF ANY PROVISION
OF THIS AGREEMENT SHALL BE INVALID OR UNENFORCEABLE IN ANY JURISDICTION, SUCH
INVALIDITY OR UNENFORCEABILITY SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY
OF THE REMAINDER OF THIS AGREEMENT IN THAT JURISDICTION OR THE VALIDITY OR
ENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT IN ANY OTHER JURISDICTION.
(d) EACH OF THE PARTIES HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN
CONNECTION WITH ANY ACTION OR SUIT REFERRED TO IN SECTION 10(c)
ABOVE.
(e) This Agreement, the Investment Agreement and the documents
contemplated hereby and thereby constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and thereof. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the Investment
Agreement and the documents contemplated hereby and thereby supersede all prior
agreements and understandings (whether written or oral) between the parties
hereto with respect to the subject matter hereof and thereof.
(f) Subject to the requirements of Section 8, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
(g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
(i) Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
(j) All consents and other determinations to be made by the Holders
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by Holders holding 50% or more of all outstanding Registrable
Securities then held by Holders.
(k) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: PURCHASER:
JUNO ONLINE SERVICES, INC. WESTGATE INTERNATIONAL, L.P.
By: Xxxxxxx International
Capital Advisors, Inc.,
as attorney-in-fact
By: /s/ XXXXXXX XXXXX By: /s/ XXXX XXXXXX
-------------------------------- --------------------------
Name: Xxxxxxx Xxxxx Name: Xxxx X. Xxxxxx
Title: President and Chief Executive Officer Title: President
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
Westgate International, L.P.
c/x Xxxxxxx International Capital Advisors, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Mr. Xxxxx Xxxxx
RE: JUNO ONLINE SERVICES, INC.
Ladies and Gentlemen:
We are counsel to Juno Online Services, Inc., a Delaware corporation
(the "COMPANY"), and have represented the Company in connection with that
certain Common Stock Investment Agreement (the "INVESTMENT AGREEMENT") dated
September __, 2000 entered into by and among the Company and Westgate
International, L.P. (the "PURCHASER") pursuant to which the Company may, from
time to time, issue to the Purchaser shares (the "SHARES") of the Company's
common stock, par value $0.01 per share. On ____________ ___, 2000, the Company
filed a Registration Statement on Form S-3 (File No. ___-______) (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC") relating to the Shares.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge as
of the date hereof, after telephonic inquiry of a member of the SEC's staff,
that any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC, and
the Shares are available for issuance and sale under the 1933 Act pursuant to
the Registration Statement.
Very truly yours,
[LAW FIRM]
By: _____________________
cc: Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
