Exhibit 10.8
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of September 14, 1999, by and among
NetCreations, Inc. (the "Company"), a New York corporation having its principal
address at 000 Xxxx Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000, and Xxxxxxxx X.
Xxxxxxx and Xxxx Xxxxx Xxxxxxxxxxxxx, each of 00 Xxxxxxxxx Xx., Xxxxxxxx, XX
00000 (together, the "Holders").
RECITALS
WHEREAS, the Holders are the principal shareholders of the Company; and
WHEREAS, without being legally bound to do so, the Company has
expressed its willingness to register with the Commission (as defined below)
under the Securities Act (as defined below) upon any of the Holders' request any
or all of their shares of Common Stock at any time following one hundred and
eighty (180) days after the closing of its initial public offering;
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, the Company and the Holders agree as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Commission" shall mean the U. S. Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
(b) "Common Stock" shall mean shares of the Company's Common
Stock, par value $0.01 per share.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, as the same shall be in
effect at the time.
(d) "Register," "registered" and "registration" shall 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, and compliance with applicable
state securities laws of such states in which any of the Holders notifies the
Company of his intention to offer Registrable Securities.
(e) "Registrable Securities" shall mean the shares of the Common
Stock held by the Holders. Such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of under such registration statement, (ii)
such securities shall have become eligible for resale pursuant to Rule 144(k)
and any restrictive legend on certificates representing such securities shall
have been removed, (iii) such securities shall have been otherwise transferred
or disposed of, and (x) new certificates therefor
not bearing a legend restricting further transfer shall have been delivered by
the Company, and (y) subsequent transfer or disposition of them shall not
require their registration or qualification under the Securities Act or any
similar state law then in force or compliance with Rule 144, or (iv) such
securities shall have ceased to be outstanding. Notwithstanding the foregoing,
Registrable Securities shall not include otherwise Registrable Securities (i)
sold by a person in a transaction in which his rights under this Agreement are
not properly assigned; or (ii) (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (B)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale or (C) the registration rights
associated with such securities have been terminated pursuant to Section 13 of
this Agreement.
(f) "Rule 144" shall mean Rule 144 promulgated under the
Securities Act or any successor or similar rule as may be enacted by the
Commission from time to time.
(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations thereunder, as the same shall be in
effect at the time
Section 2. RESTRICTIONS ON TRANSFERABILITY.
The Registrable Securities may not be sold, assigned,
transferred or pledged except in compliance with the terms and conditions of
this Agreement. At such time as the Registrable Securities cease to be
Registrable Securities under the terms of this Agreement, the provisions of this
Agreement shall no longer apply to the shares of Common Stock that theretofore
were Registrable Securities.
Section 3. RESTRICTIVE LEGEND. Each certificate representing
Registrable Securities shall (unless other permitted by the provisions of
Section 4 below) be stamped or otherwise imprinted with a legend substantially
in the following form (in addition to any legend required under applicable state
securities laws or otherwise):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENTS
COVERING THE RIGHTS TO REGISTER THESE SHARES MAY BE OBTAINED
AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
The Holders consent to the Company making a notation on its records and giving
instructions to any transfer agent of the Registrable Securities in order to
implement the restrictions on transfer established in this Agreement.
2
Section 4. NOTICE AND OTHER REQUIREMENT OF TRANSFER. None of the
Holders will make any sale, assignment, transfer, pledge or other disposition of
all or any portion of any Registrable Securities unless and until:
(a) The intended sale, assignment, transfer, pledge or other
disposition is permitted;
(b) There is in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(c) As an alternative to Section 4(b), (i) such Holder has
notified the Company of the proposed disposition and has furnished the Company
with a detailed statement of the circumstances surrounding the proposed
disposition, including the name and address of the purchaser and identifying the
Registrable Securities with respect to which such rights are being assigned, and
(ii) the purchaser, as a condition to the effectiveness of such assignment, has
executed a counterpart of this Agreement agreeing to be treated as a Holder
hereunder; and, if the Company reasonably requests, such Holder shall also
furnish the Company with an opinion of U.S. counsel, reasonably satisfactory to
the Company, that such disposition does not require registration of such shares
under the Securities Act (save that the Company acknowledges and confirms that
no such opinion shall be necessary in respect of any transfer to any spouse,
lineal descendant or family trust of such Holder).
Section 5. DEMAND REGISTRATION. (a) At any time following
one hundred and eighty (180) days following the closing of the Company's initial
public offering and, for the purposes of this Section 5(a) only, in no event on
more than three (3) occasions, any Holder may require the Company to file a
registration statement under the Securities Act for a public offering of any or
all of such Holder's Registrable Securities to be lead managed by an underwriter
designated by such demanding Holder and reasonably acceptable to the Company by
delivering written notice thereof to the Company specifying the number of
Registrable Securities to be included in such registration and the intended
method of distribution thereof (the "Demand Request"); provided that the Demand
Request for registration pursuant to this Section 5(a) shall relate to the
intention to dispose of not less than ten percent (10%) of the Registrable
Securities then owned by such Holder or permitted successors or assigns. The
Company shall, within ten (10) days after receipt, give written notice ("Notice
of Demand Request") of such Demand Request to the other Holder. Thereupon, the
Company shall prepare and file with the Commission as promptly as practicable
following the receipt of the Demand Request, and in any event within forty-five
(45) days thereafter, a registration statement covering, and shall use its best
efforts to effect the registration under the Securities Act, the Registrable
Securities included in the Demand Request and all other Registrable Securities
as to which the other Holder shall have made a written request to the Company
for registration thereof within ten (10) days after the transmittal of such
Notice of Demand Request, all to the extent necessary to permit the sale or
other disposition by such Holder of such Registrable Securities. Any Holder that
has made a Demand Request may, at any time prior to the sale of its Registrable
Securities, revoke such
3
Holder Request by providing a written notice to the Company revoking such
request. In the event of such a revocation, no Holder Request shall be deemed to
have been given for the purpose of this Section 5(a); provided, however, that in
the event of such a revocation, the Holder shall not make a Holder Request for a
period of ninety (90) days following such revocation.
(b) The Company's obligation pursuant to Section 5(a) above are subject
to the following limitations and conditions: (i) the Company shall not be
obligated to fulfill the requirements or file the registration statement
referred to therein (A) during any period of time (not to exceed ninety (90)
days in the aggregate with respect to each request) when the Company has
determined to proceed with a public offering and, in the good faith judgment of
the managing underwriter, the fulfillment of such requirement or such filing
would have an adverse effect on such offering; provided that no Holder Request
shall be deemed to have been given for the purpose of Section 5(a) above or (B)
during the ninety (90) period following the effectiveness of any previous
registration statement (the periods of time referred to in sub-clauses (A) and
(B) hereof being hereinafter referred to as "Blackout Periods"); provided, that
the aggregate period of time during which the Company shall be relieved from its
obligation to file such a registration statement pursuant to this clause (i)
shall in no event exceed ninety (90) consecutive days with respect to each
request; provided, further, that, in the case of a Blackout Period pursuant to
sub-clause (i)(A) above, the Blackout Period shall earlier terminate upon the
completion or abandonment of the relevant public offering; and (ii) the
aggregate number of days included in all Blackout Periods during any consecutive
twelve (12) months shall not exceed one hundred and eighty (180) days.
(c) The Company may elect to include in any registration statement
filed pursuant to this Section 5 any authorized but unissued shares of Common
Stock and the Company shall not, without the prior written consent of the
demanding Holders include in any such registration statement any other
securities (other than Registrable Securities); provided, that such inclusion
shall be permitted only to the extent that it is pursuant to and subject to the
terms of any underwriting agreement or arrangements entered into by the
demanding Holder whose Registrable Securities are also included therein.
Section 6. PIGGYBACK REGISTRATION. (a) If at any time or from time to
time, the Company shall determine to register any shares Common Stock for its
own account or the account of any of its shareholders, other than: (i) a
transaction relating solely to the sale of convertible debt instruments; or (ii)
a registration on Form S-4 or S-8 or another form not available for registering
the Registrable Securities for sale to the public, the Company will give to the
Holders written notice as soon as practicable prior to filing the registration
statement and include in such registration, and in any underwriting involved
therein, all the Registrable Securities specified in one or more written
requests which have been made within 15 days after receipt of such written
notice from the Company by any of the Holders, except as set forth in subsection
(b) below.
(b) If the registration is for a registered public offering
involving an underwriting, the Company shall so advise each Holder as a part of
the written notice given
4
pursuant to Section 6(a). In such event, the right of each Holder to
registration pursuant to this Section 6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. If any
Holder proposes to distribute his securities through such underwriting, he shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company (provided that the terms of such underwriting agreement must be
consistent with this Agreement). Notwithstanding any other provision of this
Section 6, if the managing underwriter determines that marketing factors require
a limitation of the number of shares to be underwritten, the managing
underwriter may limit the number of Registrable Securities to be included in the
registration and underwriting, or may limit the number of Registrable Securities
to be include in such registration. The Company shall so advise each of the
Holders and the other holders distributing their securities through such
underwriting pursuant to piggyback registration rights similar to this Section
6, and the number of shares of Registrable Securities and other securities that
may be included in the registration and underwriting shall be allocated among
such Holder and other holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by each Holder and other
securities held by other holders at the time of filing the registration
statement. If any of the Holders disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) NON-PUBLIC INFORMATION. Notwithstanding any other
provision of this Agreement, the Company's obligation to file a registration
statement, or cause such registration statement to become and remain effective,
shall be suspended for a period not to exceed 90 days (and for periods not
exceeding, in the aggregate, 180 days in any 12-month period) if there exists at
the time material non-public information relating to the Company which, in the
reasonable opinion of the Company, should not be disclosed.
Section 7. EXPENSES OF REGISTRATION. All expenses incurred in
connection with registrations pursuant to Section 5 and Section 6, including
without limitation all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and independent
accounts for the Company and expenses of any special audits of the Company's
financial statements incidental to or required by such registration, fees of the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars' fees shall be borne by the Company, except that
the Company shall not be required to pay underwriters' fees, discounts or
commissions relating to Registrable Securities or fees of one separate legal
counsel for all of the Holders.
Section 8. REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep the
Holders participating therein advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense the Company will:
5
(a) file and keep such registration pursuant to Section 5 and
Section 6 continuously effective for periods of 180 days or, in each case, such
reasonable period necessary to permit the Holders to complete the distribution
described in the registration statement relating thereto, whichever first
occurs;
(b) promptly prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities Act, and to keep such registration statement effective for
that period of time specified in Section 8(a);
(c) furnish such number of the registration statement and the
prospectus included therein, including preliminary prospectuses and other
documents incident thereto as the Holders from time to time may reasonably
request;
(d) use reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of a registration statement, or the
lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment;
(e) register or qualify such Registrable Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Holders or underwriter reasonably requests and keep such registration or
qualification effective during the period set forth in Section 8(a) above, and
do all other such things that may be necessary or desirable to enable the
Holders to consummate the public sale or other disposition in such jurisdiction
of the Registrable Securities;
(f) cause all Registrable Securities covered by such
registrations to be listed on each securities exchange, including the American
Stock Exchange, on which similar securities issued by the Company are then
listed or, if no such listing exists, use reasonable best efforts to list all
Registrable Securities on one of the New York Stock Exchange, the American Stock
Exchange or NASDAQ;
(g) cause its accountants to issue to the underwriter, if any,
or the Holders, if there is no underwriter, comfort letters and updates thereof
in customary form and covering matters of the type customarily covered in such
letters with respect to underwritten offerings;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Holders or the underwriters, if any, reasonably, request in order to
expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a stock split or a combination of
shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
6
Company's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement and afford
such entities the reasonable opportunity to review and comment thereon and
participate in the preparation of such registration statement;
(j) if the offering is underwritten, at the request of the
Holders of Registrable Securities to furnish on the date that Registrable
Securities are delivered to the underwriters for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the underwriters and to the
Holders, stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder (except that such counsel need not express any opinion
as to financial statements or other financial data contained therein) and (C) to
such other effects as reasonably may be requested by counsel for the
underwriters or by the Holders or its counsel and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
(k) notify the Holders, at any time a prospectus covered by
such registration statement is required to be delivered under the Securities
Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; and
(l) take such other actions as shall be reasonably requested
by the Holders.
Section 9. INDEMNIFICATION.
(a) In the event of a registration of any of the Registrable
Securities under the Securities Act pursuant to Section 5 and Section 6, the
Company will indemnify and hold harmless the Holders of such Registrable
Securities thereunder, each underwriter of such Registrable Securities
thereunder and each other person, if any, who controls any Holder or underwriter
within the meaning of the Securities Act, against any losses, claims, damages or
7
liabilities, joint or several, to which such Holders, underwriter or controlling
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the 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 any violation by the Company of any
rule or regulation promulgated under the Securities Act or any state securities
law applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and will reimburse the
Holders, each of their respective officers, directors and partners, and each
person controlling any of the Holders, each such underwriter and each person who
controls any such underwriter, for any reasonable legal and any other expenses
incurred in connection with investigating, defending or settling any such claim,
loss, damage, liability or action, provided that the Company will not be liable
in any such case to the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by any of
the Holders or underwriter specifically for use therein.
(b) The Holders will, if Registrable Securities held by or
issuable to the Holders are included in the securities as to which such
registration is being effected, indemnify and hold harmless the Company, each of
its directors, each officer who signs the registration statement, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company and each underwriter within the
meaning of the Securities Act, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such directors, officers, partners,
persons or underwriters for any reasonable legal or any other expenses incurred
by them in connection with investigating, defending or settling any such claim,
loss, damage, liability or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by the
Holders specifically for use therein; PROVIDED, that the total amount for which
the Holders, its officers, directors and partners, and any person controlling
such Holders, shall be liable under this Section 9(b) shall not in any event
exceed the proceeds (net of underwriting discounts and commissions) received by
the Holders from the sale of Registrable Securities sold by such Holders in such
registration.
(c) Each party entitled to indemnification under this Section
9 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the
8
"Indemnifying Party") promptly after such Indemnified Party has actual knowledge
of any claims 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 unreasonably withheld), and the
Indemnified Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
hereunder, unless such failure resulted in actual detriment to the Indemnifying
Party. 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 of such claim or
litigation.
(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification contained in the underwriting agreements entered
into among the selling Holders, the Company and the underwriters in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall be controlling as
to the Registrable Securities included in the public offering; PROVIDED, that
if, as a results of this Section 9(d), the Holders, and any persons controlling
such Holders is held liable for an amount which exceeds the aggregate proceeds
received by such Holders from the sale of Registrable Securities included in a
registration, as provided in Section 8(b) above, pursuant to such underwriting
agreement (the "Excess Liability"), the Company shall reimburse any such Holders
for such Excess Liability.
(e) If the indemnification provided for in this Section 9 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 thereunder, 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
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and 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.
Notwithstanding the foregoing, the amount that any Holder shall be obligated to
contribute pursuant to this Section 9(e) shall be limited to an amount equal to
the proceeds to such Holder of the Restricted Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which such Holder has otherwise been
required to pay in respect of such loss, claim, damage, liability or action or
any substantially similar loss, claim, damage, liability or action arising from
the sale of such Restricted Securities).
9
(f) The indemnification provided by this Section 9 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any Person entitled to indemnification hereunder and the
expiration or termination of this Agreement.
Section 10. LOCKUP AGREEMENT. In consideration for the Company agreeing
to its obligations under this Agreement, each of the Holders agrees in
connection with any registration of any Registrable Securities, at the request
of the Company or the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days) from the effective date of such registration as
the Company and the underwriters may specify, so long as the Holders or
stockholders holding more than one percent (1%) of the outstanding common stock
and all officers and directors of the Company are bound by a comparable
obligation, PROVIDED, that nothing herein shall prevent any of the Holders that
is a partnership or corporation from making a distribution of Registrable
Securities to the partners or shareholders thereof that is otherwise in
compliance with applicable securities laws, so long as such distributees agree
to be so bound.
Section 11. HOLDER'S COOPERATION.
(a) Each of the Holders shall promptly furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may request in writing and as shall be required in
connection with any registration referred to herein.
(b) Each of the Holders holding shares included in the
registration will not (until further notice by the Company) effect sales thereof
(or deliver a prospectus to any purchaser) after receipt of telegraphic or
written notice from the Company to suspend sales to permit the Company to
correct or update a registration statement or prospectus. At the end of the
period during which the Company is obligated to keep the registration statement
current and effective as described in Section 8(a), each of the Holders holding
shares of Registrable Securities included in the registration shall discontinue
sales of shares pursuant to such registration statement upon receipt of notice
from the Company of its intention to remove from registration the shares of
Registrable Securities covered by such registration statement that remain
unsold, and each of the Holders shall notify the Company of the number of such
shares registered that remain unsold immediately upon receipt of such notice
from the Company.
Section 12. RULE 144. With a view to making available to the Holders of
Registrable Securities the benefits of certain rules and regulations of the
Commission which may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144; and
10
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.
Section 13. TERMINATION OF RIGHTS.
(a) The rights of any Holder to cause the Company to register
securities under Section 5 shall terminate at such time as such Holders is able
to dispose of all of the Registrable Securities owned by him in one three-month
period pursuant to the provisions of Rule 144, provided that at the time such
Holder holds not more than one percent (1%) of the outstanding voting stock of
the Company.
(b) Notwithstanding the provisions of Section 13(a), all
rights of the Holders under this Agreement shall terminate at 5:00 P.M. Eastern
time on the date seven years after the date of this Agreement.
Section 14. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Holders as follows:
(a) The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Articles of Organization or Bylaws of the Company or any
provision of any indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and other
laws of general application affecting enforcement of creditors' rights generally
and (ii) the availability of equitable remedies as such remedies may be limited
by equitable principles of general applicability (regardless of whether
enforcement is sought in a proceeding in equity or at law).
Section 15. MISCELLANEOUS.
(a) AMENDMENTS. This Agreement may be amended only by a
writing signed by the Holders of a majority of the Registrable Securities and
the Company.
(b) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute a single instrument.
11
(c) NOTICES, ETC. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be given personally, sent by facsimile transmission or sent by prepaid
air courier or certified or express mail, postage prepaid. Any such notice shall
be deemed to have been given (a) when received, if delivered in person, sent by
facsimile transmission and confirmed in writing within three business days
thereafter or sent by prepaid air courier or (b) three business days following
the mailing thereof, if mailed by certified first class mail, postage prepaid,
in any such case to the respective addresses set forth in the initial paragraph
of this Agreement (or to such other address or addresses as a party may have
advised the other in the manner provided in this Section 15).
(d) SEVERABILITY. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(e) GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflict of law.
(f) JURISDICTION. Each of the Holders and the Company hereby
irrevocably and unconditionally consents and submits to the exclusive
jurisdiction of any state or federal court located within the County of New
York, State of New York, in connection with any, actions, suits or proceedings
arising out of or relating to this Agreement or any of the agreements delivered
in connection herewith or the transactions contemplated hereby or thereby. Each
of the Company and Holders hereby waives any objection to venue in such
jurisdiction, and agrees that service of any summons, complaint, notice or other
process relating to such proceeding may be effected (x) as provided by Section
15 (c), or (y) to their respective attorneys at their respective addresses set
forth in Section 15 (c) by internationally regarded overnight express service
such as Federal Express.
12
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
THE COMPANY:
NETCREATIONS, INC.
By:
-----------------------
Name:
Title:
THE HOLDERS:
---------------------------------
Xxxxxxxx X. Xxxxxxx
---------------------------------
Xxxx Xxxxx Duckenmiller
13
