Exhibit 10.28
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
among
SYNAPSE GROUP, INC.,
GENERAL ATLANTIC PARTNERS 46, L.P.,
GENERAL ATLANTIC PARTNERS 49, L.P.,
GENERAL ATLANTIC PARTNERS 60, L.P.,
GAP COINVESTMENT PARTNERS, L.P.,
GAP COINVESTMENT PARTNERS II, L.P.,
NSSI HOLDINGS INC.
and
THE OTHER STOCKHOLDERS NAMED HEREIN
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Dated as of June 23, 2000
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TABLE OF CONTENTS
Page(s)
1. Definitions......................................................................................... 2
2. General; Securities Subject to this Agreement....................................................... 5
(a) Grant of Rights............................................................................ 5
(b) Registrable Securities..................................................................... 5
(c) Holders of Registrable Securities.......................................................... 6
3. Demand Registration................................................................................. 6
(a) Request for Demand Registration............................................................ 6
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand Registration.................... 7
(c) Effective Demand Registration.............................................................. 7
(d) Expenses................................................................................... 7
(e) Underwriting Procedures.................................................................... 8
(f) Selection of Underwriters.................................................................. 8
4. Incidental or "Piggy-Back" Registration............................................................. 8
(a) Request for Incidental Registration........................................................ 8
(b) Expenses................................................................................... 9
5. Form S-3 Registration............................................................................... 9
(a) Request for a Form S-3 Registration........................................................ 9
(b) Form S-3 Underwriting Procedures........................................................... 10
(c) Limitations on Form S-3 Registrations...................................................... 10
(d) Expenses................................................................................... 11
(e) No Demand Registration..................................................................... 11
6. Holdback Agreements................................................................................. 11
(a) Restrictions on Public Sale by Designated Holders.......................................... 11
(b) Restrictions on Public Sale by the Company................................................. 11
7. Registration Procedures............................................................................. 11
(a) Obligations of the Company................................................................. 11
(b) Seller Information......................................................................... 14
(c) Notice to Discontinue...................................................................... 15
(d) Registration Expenses...................................................................... 15
8. Indemnification; Contribution....................................................................... 15
(a) Indemnification by the Company............................................................. 15
(b) Indemnification by Designated Holders...................................................... 16
(c) Conduct of Indemnification Proceedings..................................................... 16
(d) Contribution............................................................................... 17
9. Rule 144............................................................................................ 18
10. Miscellaneous....................................................................................... 18
(a) Recapitalizations, Exchanges, etc.......................................................... 18
(b) No Inconsistent Agreements................................................................. 18
(c) Remedies................................................................................... 19
(d) Amendments and Waivers..................................................................... 19
(e) Notices.................................................................................... 19
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(f) Successors and Assigns; Third Party Beneficiaries.......................................... 20
(g) Counterparts............................................................................... 21
(h) Headings................................................................................... 21
(i) GOVERNING LAW.............................................................................. 21
(j) Severability............................................................................... 21
(k) Entire Agreement........................................................................... 21
(l) Further Assurances......................................................................... 22
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SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is dated as
of June 23, 2000 (this "Agreement"), among Synapse Group, Inc., a Delaware
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corporation (the "Company"), General Atlantic Partners 46, L.P., a Delaware
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limited partnership ("GAP LP"), General Atlantic Partners 49, L.P., a Delaware
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limited partnership ("GAP 49"), General Atlantic Partners 60, L.P., a Delaware
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limited partnership ("GAP 60"), GAP Coinvestment Partners, L.P., a New York
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limited partnership ("GAP Coinvestment"), GAP Coinvestment Partners II, L.P., a
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Delaware limited partnership ("GAP Coinvestment II"), Xxxxxxx Xxxx ("Xxxx"), Xxx
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X. Xxxxxx ("Xxxxxx"), The Xxx X. Xxxxxx Irrevocable Credit Trust (the "Xxxxxx
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Trust"), and NSSI Holdings Inc., a Delaware corporation ("Time").
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WHEREAS, the Company, the General Atlantic Stockholders (as hereinafter
defined), Loeb, Walker, the Xxxxxx Trust and the other stockholders listed on
Schedule 1 hereto (the "Other Investors") are parties to that Amended and
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Restated Registration Rights Agreement dated as of January 12, 2000 (the
"Original Agreement");
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WHEREAS, this Agreement is made in connection with that (a) Stock Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), between the
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Company and Time, pursuant to which the Company agreed to issue and sell to Time
shares of the Company's Series C Convertible Preferred Stock, par value $0.001
per share (the "Series C Preferred Stock") and (b) Stock Purchase Agreement,
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dated as of the date hereof (the Xxxxxx Sale Agreement"), between Xxxxxx and
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Time, pursuant to which Xxxxxx has agreed to sell to Time 6,875,000 shares of
Voting Common Stock and Nonvoting Common Stock for $8.00 per share;
WHEREAS, in order to induce Time to purchase the Series C Preferred Stock,
the parties hereto have agreed to amend and restate in its entirety the Original
Agreement and pursuant to Section 10(d) of the Original Agreement, the Company,
the General Atlantic Stockholders (as defined below) holding Registrable
Securities (as defined below) representing at least a majority of the aggregate
number of Registrable Securities owned by all of the General Atlantic
Stockholders and the Major Stockholders (as defined below) holding Registrable
Securities representing at least a majority of the aggregate number of
Registrable Securities owned by all of the Major Stockholders have the power to
amend and waive certain provisions of the Original Agreement;
WHEREAS, concurrently herewith, the parties hereto are entering into the
Second Amended and Restated Stockholders Agreement (the "Stockholders
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Agreement"), pursuant to which the parties thereto have agreed to, among other
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things, certain first offer, tag-along and preemptive rights; and
WHEREAS, the parties hereto wish to enter into the agreements reflected
herein with respect to the registration under applicable securities laws of
Registrable Securities held by the Designated Holders (as defined below).
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NOW, THEREFORE, in consideration of the foregoing and other mutual
covenants and agreements set forth herein, the parties hereto hereby amend and
restate the Original Agreement and agree as follows:
1. Definitions. As used in this Agreement the following terms have the
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meanings indicated:
"Additional Stockholders" means Time, the Other Investors and any
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Permitted Transferee (as defined in the Stockholders Agreement) of any of them
to which Registrable Securities are transferred in accordance with Section 2.2
of the Stockholders Agreement.
"Affiliate" shall mean any Person who is an "affiliate" as defined in
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Rule 12b-2 of the General Rules and Regulations under the Exchange Act. GAP LP,
GAP 49, GAP 60, GAP Coinvestment and GAP Coinvestment II shall be deemed to be
Affiliates of one another.
"Approved Underwriter" has the meaning set forth in Section 3(f) of
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this Agreement.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"Common Stock" means the Voting Common Stock and Nonvoting Common
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Stock.
"Company" has the meaning set forth in the recitals to this Agreement.
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"Company Underwriter" has the meaning set forth in Section 4(a) of
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this Agreement.
"Demand Registration" has the meaning set forth in Section 3(a) of
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this Agreement.
"Designated Holder" means each of the Major Stockholders, the General
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Atlantic Stockholders and the Additional Stockholders and any transferee of any
of them to whom Registrable Securities have been transferred in accordance with
the provisions of the Stockholders Agreement and Section 10(f) of this
Agreement, other than a transferee to whom Registrable Securities have been
transferred pursuant to a Registration Statement under the Securities Act or
Rule 144 or Regulation S under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
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(or any successor statute thereto), and the rules and regulations promulgated
thereunder.
"GAP Coinvestment" has the meaning set forth in the recitals to this
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Agreement.
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"GAP Coinvestment II" has the meaning set forth in the recitals to
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this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware limited
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liability company and the general partner of GAP LP, GAP 49 and GAP 60, and any
successor to such entity.
"GAP LP" has the meaning set forth in the recitals to this Agreement.
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"GAP 49" has the meaning set forth in the recitals to this Agreement.
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"GAP 60" has the meaning set forth in the recitals to this Agreement.
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"General Atlantic Stockholders" means GAP LP, GAP 49, GAP 60, GAP
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Coinvestment and GAP Coinvestment II, and any Permitted Transferee (as defined
in the Stockholders Agreement) of any of them to which Registrable Securities
are transferred in accordance with Section 2.2 of the Stockholders Agreement.
"Holders' Counsel" has the meaning set forth in Section 7(a)(i) of
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this Agreement.
"Incidental Registration" has the meaning set forth in Section 4(a) of
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this Agreement.
"Indemnified Party" has the meaning set forth in Section 8(c) of this
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Agreement.
"Indemnifying Party" has the meaning set forth in Section 8(c) of this
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Agreement.
"Initial Public Offering" means an underwritten initial public
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offering pursuant to an effective Registration Statement filed under the
Securities Act.
"Initiating Holders" has the meaning set forth in Section 3(a) of this
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Agreement.
"Inspector" has the meaning set forth in Section 7(a)(vii) of this
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Agreement.
"Investor Warrants" means those warrants to purchase Common Stock
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issued by the Company pursuant to that Stock and Warrant Purchase Agreement
dated as of January 12, 2000 between the Company and the Purchasers named
therein.
"IPO Effectiveness Date" means the date upon which the Company
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commences its Initial Public Offering.
"Loeb" has the meaning set forth in the recitals to this Agreement.
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"Major Stockholders" means Xxxxxx, the Xxxxxx Trust, Loeb and any
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Permitted Transferee (as defined in the Stockholders Agreement) of any of them
to which Registrable Securities are transferred in accordance with Section 2.2
of the Stockholders Agreement.
"NASD" has the meaning set forth in Section 7(a)(xiii) of this
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Agreement.
"Nonvoting Common Stock" means the Company's Class B common stock, par
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value $0.001 per share.
"Original Agreement" has the meaning set forth in the recitals to this
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Agreement.
"Other Investors" has the meaning set forth in the recitals to this
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Agreement.
"Person" means any individual, firm, corporation, partnership, limited
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liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, limited liability company, government (or an
agency or political subdivision thereof) or other entity of any kind, and shall
include any successor (by merger or otherwise) of such entity.
"Preferred Stock" means the Series A Preferred Stock, the Series B
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Preferred Stock and the Series C Preferred Stock.
"Purchase Agreement" has the meaning set forth in the recitals to this
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Agreement.
"Records" has the meaning set forth in Section 7(a)(vii) of this
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Agreement.
"Registrable Securities" means each of the following: (a) any and all
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shares of Common Stock owned by the Designated Holders as of the date hereof or
issued or issuable upon conversion of shares of Preferred Stock or exercise of
the Investor Warrants owned by the Designated Holders; (b) any other shares of
Common Stock acquired or owned by any of the Designated Holders prior to the IPO
Effectiveness Date, or acquired or owned by any of the Designated Holders after
the IPO Effectiveness Date if such Designated Holder is an Affiliate of the
Company; and (c) any shares of Common Stock issued or issuable to any of the
Designated Holders with respect to the Registrable Securities by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and
shares of Common Stock issuable upon conversion, exercise or exchange thereof.
"Registration Expenses" has the meaning set forth in Section 7(d) of
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this Agreement.
"Registration Statement" means a Registration Statement filed pursuant
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to the Securities Act.
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"Securities Act" means the Securities Act of 1933, as amended (or any
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successor statute thereto), and the rules and regulations promulgated
thereunder.
"Series A Preferred Stock" means the Series A Convertible Preferred
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Stock, par value $0.001 per share, of the Company.
"Series B Preferred Stock" means the Series B Convertible Preferred
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Stock, par value $0.001 per share, of the Company.
"Series C Preferred Stock" has the meaning set forth in the recitals
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to this Agreement.
"S-3 Initiating Holders" has the meaning set forth in Section 5(a) of
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this Agreement.
"S-3 Registration" has the meaning set forth in Section 5(a) of this
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Agreement.
"SEC" means the Securities and Exchange Commission or any similar
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agency then having jurisdiction to enforce the Securities Act.
"Stockholders Agreement" has the meaning set forth in the recitals to
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this Agreement.
"Time" has the meaning set forth in the recitals to this Agreement.
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"Time Stockholders" means Time and any Permitted Transferee (as
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defined in the Stockholders Agreement) to which Registrable Securities are
transferred in accordance with Section 2.2 of the Stockholders Agreement.
"Voting Common Stock" means the Company's Class A common stock, par
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value $0.001 per share.
"Xxxxxx" has the meaning set forth in the recitals to this Agreement.
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"Xxxxxx Sale Agreement" has the meaning set forth in the recitals to
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this Agreement.
"Xxxxxx Trust" has the meaning set forth in the recitals to this
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Agreement.
2. General; Securities Subject to this Agreement.
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(a) Grant of Rights. The Company hereby grants registration rights
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to the Major Stockholders, the General Atlantic Stockholders and the Additional
Stockholders upon the terms and conditions set forth in this Agreement.
(b) Registrable Securities. For the purposes of this Agreement,
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Registrable Securities will cease to be Registrable Securities when (i) a
Registration Statement covering such Registrable Securities has been
declared effective under the
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Securities Act by the SEC and such Registrable Securities have been disposed of
pursuant to such effective Registration Statement, (ii) the entire amount of
Registrable Securities proposed to be sold in a single sale, in the opinion of
counsel satisfactory to the Company and the Designated Holder, each in their
reasonable judgment, may be distributed to the public without any limitation as
to volume pursuant to Rule 144 (or any successor provision then in effect) under
the Securities Act or (iii) the Registrable Securities are proposed to be sold
or distributed by a Person not entitled to the registration rights granted by
this Agreement.
(c) Holders of Registrable Securities. A Person is deemed to be a
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holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option to purchase, or a security convertible into or
exercisable or exchangeable for, Registrable Securities whether or not such
acquisition or conversion has actually been effected. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
3. Demand Registration.
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(a) Request for Demand Registration. At any time after the IPO
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Effectiveness Date and prior to the time the Company is eligible to file a
Registration Statement on Form S-3 or any successor thereto, (i) one or more of
the General Atlantic Stockholders as a group, acting through GAP LLC or its
written designee, or (ii) any Time Stockholder (each group under (i) or (ii),
the "Initiating Holders") may make a written request to the Company to register,
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under the Securities Act (other than pursuant to a Registration Statement on
Form S-4 or S-8 or any successor thereto) (a "Demand Registration"), the number
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of Registrable Securities stated in such request; provided, however, that the
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Company shall not be obligated to effect more than one Demand Registration for
the General Atlantic Stockholders and more than one Demand Registration for Time
pursuant to this Section 3. For purposes of the preceding sentence, two or more
Registration Statements filed in response to one demand shall be counted as one
Registration Statement. If at the time of any request to register Registrable
Securities pursuant to this Section 3(a), the Company is engaged in, or has
fixed plans to engage in within ninety (90) days of the time of such request, a
registered public offering or is engaged in any other activity which, in the
good faith determination of the Board of Directors of the Company, would be
adversely affected by the requested registration to the material detriment of
the Company, then the Company may at its option direct that such request be
delayed for a reasonable period not in excess of four (4) months from the date
of such request, such right to delay a request to be exercised by the Company
not more than once in any one-year period. In addition, the Company shall not be
required to effect any registration within one hundred twenty (120) days after
the effective date of any other Registration Statement of the Company. The
request for a Demand Registration by the Initiating Holders shall state the
amount of the Registrable Securities proposed to be sold and the intended method
of disposition thereof. Upon a request for a
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Demand Registration, the Company shall promptly take such steps as are necessary
or appropriate to prepare for the registration of the Registrable Securities to
be registered.
(b) Incidental or "Piggy-Back" Rights with Respect to a Demand
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Registration. Each of the Designated Holders (other than Initiating Holders
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which have requested a registration under Section 3(a)) may offer its or his
Registrable Securities under any Demand Registration pursuant to this Section 3.
Within ten (10) days after the receipt of a request for a Demand Registration
from an Initiating Holder, the Company shall (i) give written notice thereof to
all of the Designated Holders (other than Initiating Holders which have
requested a registration under Section 3(a)) and (ii) subject to Section 3(e),
include in such registration all of the Registrable Securities held by such
Designated Holders from whom the Company has received a written request for
inclusion therein within ten (10) days of the receipt by such Designated Holders
of such written notice referred to in clause (i) above. Each such request by
such Designated Holders shall specify the number of Registrable Securities
proposed to be registered and the intended method of disposition thereof. The
failure of any Designated Holder to respond within such 10-day period referred
to in clause (ii) above shall be deemed to be a waiver of such Designated
Holder's rights under this Section 3 with respect to such Demand Registration,
provided that any Designated Holder may waive its rights under this Section 3
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prior to the expiration of such 10-day period by giving written notice to the
Company, with a copy to the Initiating Holders. If a Designated Holder sends the
Company a written request for inclusion of part or all of such Designated
Holder's Registrable Securities in a registration, such Designated Holder shall
not be entitled to withdraw or revoke such request without the prior written
consent of the Company in its sole discretion unless, as a result of facts or
circumstances arising after the date on which such request was made relating to
the Company or to market conditions, such Designated Holder reasonably
determines that participation in such registration would have a material adverse
effect on such Designated Holder.
(c) Effective Demand Registration. The Company shall use best
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efforts to cause any such Demand Registration to become and remain effective not
later than one hundred twenty (120) days after it receives a request under
Section 3(a) hereof. A registration shall not constitute a Demand Registration
until it has become effective and remains continuously effective for the lesser
of (i) the period during which all Registrable Securities registered in the
Demand Registration are sold and (ii) ninety (90) days; provided, however, that
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a registration shall not constitute a Demand Registration if (x) after such
Demand Registration has become effective, such registration or the related
offer, sale or distribution of Registrable Securities thereunder is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court for any reason not attributable to the
Initiating Holders and such interference is not thereafter eliminated or (y) the
conditions specified in the underwriting agreement, if any, entered into in
connection with such Demand Registration are not satisfied or waived, other than
by reason of a failure by the Initiating Holders.
(d) Expenses. In any registration initiated as a Demand
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Registration, the Company shall pay all Registration Expenses (other than
broker's commissions and underwriter's discounts and commissions) in connection
therewith.
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(e) Underwriting Procedures. If the Company or the Initiating
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Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders to which the requested Demand Registration relates so elect,
the Company shall use best efforts to cause such Demand Registration to be in
the form of a firm commitment underwritten offering and the managing underwriter
or underwriters selected for such offering shall be the Approved Underwriter
selected in accordance with Section 3(f). In connection with any Demand
Registration under this Section 3 involving an underwritten offering, none of
the Registrable Securities held by any Designated Holder making a request for
inclusion of such Registrable Securities pursuant to Section 3(b) hereof shall
be included in such underwritten offering unless such Designated Holder accepts
the terms of the offering as agreed upon by the Company, the Initiating Holders
and the Approved Underwriter, and then only in such quantity as will not, in the
opinion of the Approved Underwriter, jeopardize the success of such offering by
the Initiating Holders. If the Approved Underwriter advises the Company in
writing that in its opinion the aggregate amount of such Registrable Securities
requested to be included in such offering is sufficiently large to have a
material adverse effect on the success of such offering, then the Company shall
include in such registration only the aggregate amount of Registrable Securities
that in the opinion of the Approved Underwriter may be sold without any such
material adverse effect and shall reduce the amount of Registrable Securities to
be included in such registration, first as to the Company, second as to the
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Designated Holders (who are not Initiating Holders and who requested to
participate in such registration pursuant to Section 3(b) hereof) as a group, if
any, and third as to the Initiating Holders as a group, pro rata within the
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group based on the number of Registrable Securities owned by each such
Designated Holder or Initiating Holder, as the case may be.
(f) Selection of Underwriters. If any Demand Registration or S-3
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Registration, as the case may be, of Registrable Securities is in the form of an
underwritten offering, the Company shall select and obtain an investment banking
firm of national reputation to act as the managing underwriter of the offering
(the "Approved Underwriter"); provided, however, that the Approved Underwriter
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shall, in any case, also be approved by the Initiating Holders or S-3 Initiating
Holders, as the case may be, such approval not to be unreasonably withheld.
4. Incidental or "Piggy-Back" Registration.
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(a) Request for Incidental Registration. At any time after the
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Offering, if the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering by the Company for its own account or
for the account of any other Person (in each case, other than a Registration
Statement on Form S-4 or S-8 or any successor thereto or an offering pursuant to
Section 3 or Section 5 hereof), then the Company shall give written notice of
such proposed registration to each of the Designated Holders at least ten (10)
days before the anticipated filing date, and such notice shall describe the
proposed registration and distribution and offer such Designated Holders the
opportunity to register the number of Registrable Securities as each such holder
may request (an "Incidental Registration"). The Company shall, and shall use
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best efforts to cause the managing underwriter or underwriters of a proposed
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underwritten offering (the "Company Underwriter") to permit each of the
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Designated Holders who have requested in writing (within ten (10) days of the
notice provided for in the preceding sentence) to participate in the Incidental
Registration to include its or his Registrable Securities in such offering on
the same terms and conditions as the securities of the Company included therein.
The failure of any Designated Holder to respond within such 10-day period
referred to above shall be deemed to be a waiver of such Designated Holder's
rights under this Section 4 with respect to such Incidental Registration,
provided that any Designated Holder may waive its rights under this Section 4
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prior to the expiration of such 10-day period by giving written notice to the
Company. In connection with any Incidental Registration under this Section 4(a)
involving an underwritten offering, the Company shall not be required to include
any Registrable Securities in such underwritten offering unless the holders
thereof accept the terms of the underwritten offering as agreed upon between the
Company and the Company Underwriter, and then only in such quantity as will not,
in the opinion of the Company Underwriter, jeopardize the success of the
offering by the Company. If in the written opinion of the Company Underwriter
the registration of all or part of the Registrable Securities which the
Designated Holders have requested to be included would materially adversely
affect the success of such offering, then the Company shall be required to
include in such Incidental Registration, to the extent of the amount that the
Company Underwriter believes may be sold without causing such adverse effect,
first, in the case of a Registration Statement by the Company for its own
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account, all of the securities to be offered for the account of the Company;
second, the Registrable Securities to be offered for the account of the
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Designated Holders pursuant to this Section 4, pro rata based on the number of
Registrable Securities owned by each such Designated Holder; and third, any
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other securities requested to be included in such underwritten offering.
(b) Expenses. All Registration Expenses (other than broker's
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commissions and underwriter's discounts and commissions with respect to the sale
of any Registrable Securities) in connection with any Incidental Registration
pursuant to this Section 4, whether or not such Incidental Registration becomes
effective, shall be borne by the Company.
5. Form S-3 Registration.
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(a) Request for a Form S-3 Registration. Upon the Company becoming
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eligible, in the event that the Company shall receive from (i) one or more of
the General Atlantic Stockholders as a group, acting through GAP LLC or its
written designee, or (ii) any Time Stockholder (each group under (i) or (ii),
the "S-3 Initiating Holders") a written request that the Company register, under
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the Securities Act, on Form S-3 (or any successor form then in effect) (an
"S-3 Registration"), all or a portion of the Registrable Securities owned by
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such S-3 Initiating Holders, the Company shall give written notice of such
request to all of the Designated Holders (other than S-3 Initiating Holders
which have requested an S-3 Registration under this Section 5(a)) at least ten
(10) days before the anticipated filing date of such Form S-3, and such notice
shall describe the proposed registration and offer such Designated Holders the
opportunity to register the number of Registrable Securities as each such
Designated Holder may request in writing to the Company, given within ten (10)
days after their receipt from the
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Company of the written notice of such registration. The failure of any
Designated Holder to respond within such 10-day period referred to above shall
be deemed to be a waiver of such Designated Holder's rights under this Section 5
with respect to such S-3 Registration, provided that any Designated Holder may
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waive its rights under this Section 5 prior to the expiration of such 10-day
period by giving written notice to the Company. The Company shall (i) take such
steps as are necessary or appropriate to prepare for the registration of the
Registrable Securities to be registered and (ii) subject to Section 5(b), use
best efforts to (x) cause such registration pursuant to this Section 5(a) to
become and remain effective as soon as practicable, but in any event not later
than one hundred twenty (120) days after it receives a request therefor and (y)
include in such offering the Registered Securities of the Designated Holders
(other than S-3 Initiating Holders which have requested an S-3 Registration
under this Section 5(a)) who have requested in writing to participate in such
registration on the same terms and conditions as the Registrable Securities of
the S-3 Initiating Holders included therein.
(b) Form S-3 Underwriting Procedures. If the Company or the S-3
--------------------------------
Initiating Holders holding a majority of the Registrable Securities held by all
of the S-3 Initiating Holders to which the requested S-3 Registration relates so
elect, the Company shall use best efforts to cause such S-3 Registration
pursuant to this Section 5 to be in the form of a firm commitment underwritten
offering and the managing underwriter or underwriters selected for such offering
shall be the Approved Underwriter selected in accordance with Section 3(f). In
connection with any S-3 Registration under Section 5(a) involving an
underwritten offering, the Company shall not be required to include any
Registrable Securities in such underwritten offering unless the Designated
Holders thereof accept the terms of the underwritten offering as agreed upon
between the Company, the Approved Underwriter and the S-3 Initiating Holders,
and then only in such quantity as will not, in the opinion of such underwriter,
jeopardize the success of such offering by the S-3 Initiating Holders. If in the
written opinion of the Approved Underwriter the registration of all or part of
the Registrable Securities which the S-3 Initiating Holders and the other
Designated Holders have requested to be included would materially adversely
affect the success of such public offering, then the Company shall be required
to include in the underwritten offering, to the extent of the amount that the
Approved Underwriter believes may be sold without causing such adverse effect,
first, all of the Registrable Securities to be offered for the account of the S-
-----
3 Initiating Holders pro rata based on the number of Registrable Securities
owned by such S-3 Initiating Holders; second, the Registrable Securities to be
------
offered for the account of the other Designated Holders who requested inclusion
of their Registrable Securities pursuant to Section 5(a), pro rata based on the
number of Registrable Securities owned by such Designated Holders, and third,
-----
any other securities requested to be included in such underwritten offering.
(c) Limitations on Form S-3 Registrations. If at the time of any
-------------------------------------
register Registrable Securities pursuant to Section 5(a), the Company is engaged
in, or has fixed plans to engage in within ninety (90) days of the time of such
request, a registered public offering or is engaged in any other activity which,
in the good faith determination of the Board of Directors of the Company, would
be adversely affected by the requested S-3 Registration to the material
detriment of the Company, then
-10-
the Company may at its option direct that such request be delayed for a
reasonable period not in excess of four (4) months from the date of such
request, such right to delay a request to be exercised by the Company not more
than once in any one-year period. In addition, the Company shall not be required
to effect any registration pursuant to Section 5(a) (i) within one hundred
twenty (120) days after the effective date of any other Registration Statement
of the Company, (ii) if the Company has effected two registrations on Form S-3
pursuant to Section 5(a) within the preceding twelve month period or (iii) if
Form S-3 is not available for such offering by the S-3 Initiating Holders.
(d) Expenses. In connection with any registration pursuant to this
--------
Section 5, the Company shall pay all Registration Expenses (other than broker's
commissions and underwriter's discounts and commissions) in connection
therewith.
(e) No Demand Registration. No registration requested by any Holder
----------------------
Designated pursuant to this Section 5 shall be deemed a Demand Registration
pursuant to Section 3.
6. Holdback Agreements.
--------------------
(a) Restrictions on Public Sale by Designated Holders. If and
-------------------------------------------------
to the extent requested by the Company, the Initiating Holders or the S-3
Initiating Holders, as the case may be, in the case of a non-underwritten public
offering or if and to the extent requested by the Approved Underwriter or the
Company Underwriter, as the case may be, in the case of an underwritten public
offering, each Designated Holder of Registrable Securities agrees (i) not to
effect any public sale or distribution of any Registrable Securities or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 under the Securities Act, and
(ii) not to make any request for a Demand Registration or S-3 Registration under
this Agreement, during the 90-day period, such shorter period agreed upon by
such Designated Holder and the requesting party or such longer period, not to
exceed 180 days, requested by the Approved Underwriter or Company Underwriter
beginning on the effective date of any Registration Statement (except as part of
such registration).
(b) Restrictions on Public Sale by the Company. The Company
------------------------------------------
agrees not to effect any public sale or distribution of any of its securities,
or any securities convertible into or exchangeable or exercisable for such
securities (except pursuant to registrations on Form S-4 or S-8 or any successor
thereto), during the period beginning on the effective date of any Registration
Statement in which the Designated Holders of Registrable Securities are
participating and ending on the earlier of (i) the date on which all Registrable
Securities registered on such Registration Statement are sold and (ii) 90 days,
or such longer period, not to exceed 180 days, requested by the Approved
Underwriter or Company Underwriter after the effective date of such Registration
Statement (except as part of such registration).
7. Registration Procedures.
------------------------
(a) Obligations of the Company. Whenever registration of Registrable
--------------------------
Securities has been requested pursuant to Section 3, Section 4 or Section 5
of this
-11-
Agreement, the Company shall use best efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method of
distribution thereof as quickly as practicable, and in connection with any such
request, the Company shall, as expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement on
any form for which the Company then qualifies or which counsel for the Company
shall deem appropriate and which form shall be available for the sale of such
Registrable Securities in accordance with the intended method of distribution
thereof, and use all reasonable commercial efforts to cause such Registration
Statement to become effective; provided, however, that (x) before filing a
-------- -------
Registration Statement or prospectus or any amendments or supplements thereto,
the Company shall provide counsel selected by the Designated Holders holding a
majority of the Registrable Securities being registered in such registration
("Holders' Counsel") and any other Inspector with an adequate and appropriate
----------------
opportunity to review and comment on those portions of such Registration
Statement and each prospectus included therein (and each amendment or supplement
thereto) to be filed with the SEC that related to the Designated Holders and the
distribution of the Registrable Securities, subject to such documents being
under the Company's control, and (y) the Company shall notify the Holders'
Counsel and each seller of Registrable Securities of any stop order issued or
threatened by the SEC and take all reasonable action required to prevent the
entry of such stop order or to remove it if entered;
(ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
the lesser of (x) 90 days and (y) such shorter period which will terminate when
all Registrable Securities covered by such Registration Statement have been
sold, and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;
(iii) as soon as reasonably possible, furnish to each seller of
Registrable Securities such number of copies of such Registration Statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), and the prospectus included in such Registration Statement (including
each preliminary prospectus) as each such seller may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by such
seller;
(iv) register or qualify such Registrable Securities under such
other securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may request, and to continue such qualification in effect
in such jurisdiction for as long as permissible pursuant to the laws of such
jurisdiction, or for as long as any such seller requests or until all of such
Registrable Securities are sold or for 90 days, whichever is shortest, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable any such seller to consummate the disposition in such jurisdictions of
the Registrable Securities owned by such seller; provided, however, that
-------- -------
-12-
the Company shall not be required to (x) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 7(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z)
consent to general service of process in any such jurisdiction;
(v) notify each seller of Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, and the
Company shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller a reasonable number of copies of such supplement to or an
amendment of such prospectus as may be necessary so that, after delivery to the
purchasers of such Registrable Securities, such prospectus shall not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made;
(vi) enter into and perform customary agreements (including an
underwriting agreement in customary form with the Approved Underwriter or
Company Underwriter, if any, selected as provided in Section 3, Section 4 or
Section 5, as the case may be) and take such other actions as are prudent and
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities;
(vii) make available at reasonable times for inspection by any
seller of Registrable Securities, any managing underwriter participating in any
disposition of such Registrable Securities pursuant to a Registration Statement,
Holders' Counsel and any attorney, accountant or other agent retained by any
such seller or any managing underwriter (each, an "Inspector" and collectively,
---------
the "Inspectors"), all financial and other records, pertinent corporate
----------
documents and properties of the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
--------
diligence responsibility, and cause the Company's and its subsidiaries'
officers, directors and employees, and the independent public accountants of the
Company, to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (and the
Inspectors shall confirm their agreement in writing in advance to the Company if
the Company shall so request) unless (x) the disclosure of such Records is
necessary, in the Company's judgment, to avoid or correct a misstatement or
omission in the Registration Statement, (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction after exhaustion of all appeals therefrom or (z) the information in
such Records was known to the Inspectors on a non-confidential basis prior to
its disclosure by the Company or has been made generally available to the
public. Each seller of Registrable Securities agrees that it shall, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the
-13-
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(viii) if such sale is pursuant to an underwritten offering, use
best efforts to obtain a "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by "cold comfort" letters as Holders' Counsel or the
managing underwriter reasonably request;
(ix) use best efforts to furnish, at the request of any seller
of Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration or, if such securities are
not being sold through underwriters, on the date the Registration Statement with
respect to such securities becomes effective, an opinion, dated such date, of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the seller making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as such seller may reasonably request and are
customarily included in such opinions;
(x) otherwise use best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable but no later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement covering a
period of twelve (12) months beginning after the effective date of the
Registration Statement, in a manner which satisfies the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(xi) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied;
--------
(xii) keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Section 3, Section 4 or
Section 5 hereunder;
(xiii) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD"); and
----
(xiv) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
(b) Seller Information. The Company may require each seller of
------------------
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding the distribution of such securities as
the Company may from time to time reasonably request in writing.
-14-
(c) Notice to Discontinue. Each Designated Holder of Registrable
---------------------
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 7(a)(v), such Designated
Holder shall forthwith discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Designated Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 7(a)(v) and, if so directed by the
Company, such Designated Holder shall deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Designated
Holder's possession, of the prospectus covering such Registrable Securities
which is current at the time of receipt of such notice. If the Company shall
give any such notice, the Company shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement
(including, without limitation, the period referred to in Section 7(a)(ii)) by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 7(a)(v) to and including the date when
sellers of such Registrable Securities under such Registration Statement shall
have received the copies of the supplemented or amended prospectus contemplated
by and meeting the requirements of Section 7(a)(v).
(d) Registration Expenses. The Company shall pay all expenses (other
---------------------
than as set forth in Sections 3(d), 4(b) and 5(d)) arising from or incident to
the performance of, or compliance with, this Agreement, including, without
limitation, (i) SEC, stock exchange and NASD registration and filing fees, (ii)
all fees and expenses incurred in complying with securities or "blue sky" laws
(including reasonable fees, charges and disbursements of counsel in connection
with "blue sky" qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting fees, charges and expenses incurred by the
Company (including, without limitation, any expenses arising from any "cold
comfort" letters or any special audits incident to or required by any
registration or qualification) and any legal fees, charges and expenses incurred
by the Company and in the case of a Demand Registration, the Initiating Holders
and (v) any liability insurance or other premiums for insurance obtained in
connection with any Demand Registration or piggy-back registration thereon,
Incidental Registration or S-3 Registration pursuant to the terms of this
Agreement, regardless of whether such Registration Statement is declared
effective. The expenses described in Subsections (i) through (iii) of this
Section 7(d) are referred to herein as "Registration Expenses." The Designated
---------------------
Holders of Registrable Securities sold pursuant to a Registration Statement
shall bear the expense of any broker's commission or underwriter's discount or
commission relating to registration and sale of such Holders' Registrable
Securities.
8. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless, to the fullest extent permitted by law, each Designated
Holder, its officers, directors, trustees, partners, employees, advisors and
agents and each Person who controls (within the meaning of the Securities Act or
the Exchange Act) such Designated Holder from and against any and all losses,
claims, damages, liabilities and
-15-
expenses (including reasonable costs of investigation) arising out of or based
upon any untrue, or allegedly untrue, statement of a material fact contained in
any Registration Statement, prospectus or preliminary prospectus or notification
or offering circular (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or arising out of or based upon
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,
except insofar as the same are caused by or contained in any information
concerning such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to Section 8(b). The Company shall
also provide customary indemnities to any underwriters of the Registrable
Securities, their officers, directors and employees and each Person who controls
such underwriters (within the meaning of the Securities Act and the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Designated Holders of Registrable Securities.
(b) Indemnification by Designated Holders. In connection with any
-------------------------------------
Registration Statement in which a Designated Holder is participating pursuant to
Section 3, Section 4 or Section 5 hereof, each such Designated Holder shall
promptly furnish to the Company in writing such information with respect to such
Designated Holder as the Company may reasonably request or as may be required by
law for use in connection with any such Registration Statement or prospectus and
all information required to be disclosed in order to make the information
previously furnished to the Company by such Designated Holder not materially
misleading or necessary to cause such Registration Statement not to omit a
material fact with respect to such Designated Holder necessary in order to make
the statements therein not misleading. Each Designated Holder agrees to
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, any underwriter retained by the Company and their respective directors,
trustees, partners, officers, employees, advisors and agents and each Person who
controls the Company or such underwriter (within the meaning of the Securities
Act and the Exchange Act) to the same extent as the foregoing indemnity from the
Company to the Designated Holders, but only with respect to any such information
with respect to such Designated Holder furnished in writing to the Company by
such Designated Holder expressly for use therein, including, without limitation,
the information furnished to the Company pursuant to this Section 8(b);
provided, however, that the total amount to be indemnified by such Designated
-------- -------
Holder pursuant to this Section 8(b) shall be limited to the net proceeds
received by such Designated Holder in the offering to which the Registration
Statement or prospectus relates.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
--------------------------------------
indemnification hereunder (the "Indemnified Party") agrees to give prompt
-----------------
written notice to the indemnifying party (the "Indemnifying Party") after the
------------------
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, that the failure so to notify the
-------- -------
Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party hereunder; except to the
-16-
extent that the Indemnifying Party is materially prejudiced or otherwise
forfeits substantive rights or defenses by reason of such failure. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel (other than reasonable costs of investigation) shall be paid by the
Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii)
the Indemnifying Party fails to assume the defense of such action with counsel
satisfactory to the Indemnified Party in its reasonable judgment or (iii) the
named parties to any such action (including any impleaded parties) include both
the Indemnifying Party and the Indemnified Party and such parties have been
advised by such counsel that either (x) representation of such Indemnified Party
and the Indemnifying Party by the same counsel would be inappropriate under
applicable standards of professional conduct or (y) there may be one or more
legal defenses available to the Indemnified Party which are different from or
additional to those available to the Indemnifying Party. In any of such cases,
the Indemnifying Party shall not have the right to assume the defense of such
action on behalf of such Indemnified Party, it being understood, however, that
the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for all
Indemnified Parties. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the consent of such
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which such Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability for claims that are the subject matter of such proceeding.
(d) Contribution. If the indemnification provided for in this Section
------------
8 from the Indemnifying Party is unavailable to an Indemnified Party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative faults of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Sections 8(a), 8(b) and 8(c), any legal or other
fees, charges or
-17-
expenses reasonably incurred by such party in connection with any investigation
or proceeding; provided that the total amount to be indemnified by such
--------
Designated Holder shall be limited to the net proceeds received by such
Designated Holder in the offering.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. 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.
9. Rule 144. The Company covenants that from and after the IPO
--------
Effectiveness Date it shall (a) file any reports required to be filed by it
under the Exchange Act and (b) take such further action as each Designated
Holder of Registrable Securities may reasonably request (including providing any
information necessary to comply with Rule 144 under the Securities Act), all to
the extent required from time to time to enable such Designated Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, or (ii) any similar rules or
regulations hereafter adopted by the SEC. The Company shall, upon the request of
any Designated Holder of Registrable Securities, deliver to such Designated
Holder a written statement as to whether it has complied with such requirements.
10. Miscellaneous.
-------------
(a) Recapitalizations, Exchanges, etc. The provisions of this
---------------------------------
Agreement shall apply, to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of Voting Common Stock into
which the shares of Nonvoting Stock are converted, exchanged or substituted in
any recapitalization or other capital reorganization by the Company or otherwise
and (iii) any and all equity securities of the Company or any successor or
assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by sale, merger or otherwise) to
enter into a new registration rights agreement with the Designated Holders on
terms substantially the same as this Agreement as a condition of any such
transaction.
(b) No Inconsistent Agreements. The Company represents and
--------------------------
warrants that it has not granted to any Person the right to request or require
the Company to register any securities issued by the Company, other than the
rights granted to the Designated Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement or grant any
additional registration rights to any Person or with respect to
-18-
any securities which are not Registrable Securities which are prior in right to
or inconsistent with the rights granted in this Agreement.
(c) Remedies. The Designated Holders, in addition to being
--------
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of their rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for specific performance the
defense that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided
----------------------
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless consented to in writing by (i) the Company, (ii) the
Major Stockholders holding Registrable Securities representing (after giving
effect to any adjustments) at least a majority of the aggregate number of
Registrable Securities owned by all of the Major Stockholders, (iii) the General
Atlantic Stockholders holding Registrable Securities representing (after giving
effect to any adjustments) at least a majority of the aggregate number of
Registrable Securities owned by all of the General Atlantic Stockholders and
(iv) Time and any Permitted Transferee (as defined in the Stockholders
Agreement) of Time to which Time has transferred Registrable Securities
representing (after giving effect to any adjustments) at least a majority of the
aggregate number of Registrable Securities owned by Time and all of Time's
Permitted Transferees. Any such written consent shall be binding upon the
Company and all of the Designated Holders.
(e) Notices. All notices, demands and other communications
-------
provided for or permitted hereunder shall be made in writing and shall be made
by registered or certified first-class mail, return receipt requested,
telecopier, courier service, overnight mail or personal delivery:
(i) if to the Company or the Major Stockholders:
Synapse Group, Inc.
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx Xxxx
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
(ii) if to the General Atlantic Stockholders:
c/o General Atlantic Service Corporation
-19-
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
(iii) if to Time:
NSSI Holdings Inc.
c/o Time Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
with a copy to:
Time Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
and
Xxxxxxxxx Xxxxxxx Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
(iv) if to any other Designated Holder, at its
address as it appears on the record books of the Company.
All such notices and communications shall be deemed to have
been duly given when delivered by hand, if personally delivered; when delivered
by courier or overnight mail, if delivered by commercial courier service or
overnight mail; five (5) Business Days after being deposited in the mail,
postage prepaid, if mailed; and when receipt is mechanically acknowledged, if
properly telecopied.
(f) Successors and Assigns; Third Party Beneficiaries. This
-------------------------------------------------
Agreement shall inure to the benefit of and be binding upon the heirs, legatees,
legal representatives, successors and permitted assigns of each of the parties
hereto as hereinafter provided. The Demand Registration rights of the General
Atlantic Stockholders contained in Section 3 hereof and the other rights of each
of the General
-20-
Atlantic Stockholders with respect thereto shall be, with respect to any
Registrable Security, (i) automatically transferred among the General Atlantic
Stockholders and (ii) in all other cases, transferred only with the consent of
the Company. The incidental or "piggy-back" registration rights of the
Designated Holders contained in Sections 3(b) and 4 hereof, the S-3 Registration
rights contained in Section 5 hereof and the other rights of each of the
Designated Holders with respect thereto shall be, with respect to any
Registrable Security, automatically transferred by such Designated Holder to any
Person who is the transferee of such Registrable Security; provided that (x) the
Company receives notice of such transfer and (y) prior to such transfer, such
assignee shall assume all of the applicable assignor's obligations hereunder.
All of the obligations of the Company hereunder shall survive any such transfer.
No Person other than the parties hereto and their heirs, legatees, legal
representatives, successors and permitted assigns is intended to be a
beneficiary of any of the rights granted hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
--------
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION. The parties hereto
agree that any suit, action or proceeding instituted against either of them with
respect to this Agreement (including any exhibits hereto) shall be brought in
any federal or state court located in New York, New York. The parties hereto, by
the execution and delivery of this Agreement, irrevocably waive any objection or
defense to the institution of any action in New York, New York based on improper
venue, the convenience of the forum or the jurisdiction of such courts, or to
the execution of judgments resulting therefrom, and the parties hereto
irrevocably accept and submit to the jurisdiction of the aforesaid courts in any
suit, action or proceeding and consent to the service of process by certified
mail at their respective addresses set forth in Section 10(e) hereof.
(j) Severability. If any one or more of the provisions contained
------------
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, it being intended that all
of the rights and privileges of the Designated Holders shall be enforceable to
the fullest extent permitted by law.
(k) Entire Agreement. This Agreement is intended by the parties
----------------
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other
-21-
than those set forth or referred to herein and in the Purchase Agreement and the
Stockholders Agreement. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(l) Further Assurances. Each of the parties shall execute such
------------------
documents and perform such further acts as may be reasonably required or
necessary to carry out or to perform the provisions of this Agreement.
[Remainder of page intentionally left blank.]
-22-
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Agreement on the date first written above.
SYNAPSE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxx Xxxx
Title: President
GENERAL ATLANTIC PARTNERS 46, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
GENERAL ATLANTIC PARTNERS 49, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
GENERAL ATLANTIC PARTNERS 60, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
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GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
/s/ Xxxxxxx X. Xxxx
----------------------------------
XXXXXXX XXXX
/s/ Xxx Xxxxxx
----------------------------------
XXX XXXXXX
THE XXX X. XXXXXX IRREVOCABLE
CREDIT TRUST
By: /s/ Xxxxx X. Xxxxx III
-----------------------------
Xxxxx X. Xxxxx III, Trustee
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx, Trustee
NSSI HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Name: Xxxxxx X. Xxxx
Title: President
-24-
THE LOEB FAMILY LIMITED PARTNERSHIP
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Xxxxxxx Xxxx, General Partner
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SCHEDULE 1
Other Investors
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1. Xxxxxxx Limited Partnership
2. Tas Parafestas, as Trustee of the Xxxx Creek Trust
3. NS Investors Limited Partnership
4. Xxxxx & Company, Incorporated
5. Hiwan Holdings, Inc.
6. Brentwood Investment Fund, LLC
7. Gage Marketing Group, LLC
8. Promerica Capital, LLC
9. WFIP I, LLC
10. Xxxxxxxx X. Xxxx and Xxxxxxxxx X. Xxxx
11. Xxxxxx X. Xxxxx XX
12. Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxxx
13. Xxxxx Xxxxxxx
14. Xxxxxxx Xxxxxxxxx
15. Xxxxx Xxxxxx
16. Xxxxxxxx Xxxx, Trustee u/ The Xxxxxxx Xxxx Irrevocable Trust f/b/o Xxxxxxx
Xxxxxxx Xxxx dated December 28, 1995
17. Xxxxxxxx Xxxx, Trustee u/ The Xxxxxxx Xxxx Irrevocable Trust f/b/o
Xxxxxxxxx Xxxxxxxxx Xxxx dated December 28, 1995
18. Xxxxx Xxxxxxx, as Trustee of The Xxxxxxx Xxxx Irrevocable Trust u/a dated
3/24/99 f/b/o Marc Xxxxx Xxxx
19. Xxxxx Xxxxxxx, as Trustee of The Xxxxxxx Xxxx Irrevocable Trust u/a dated
3/24/99 f/b/o Xxxxxx Xxxx Xxxx
20. Xxxxx Xxxxxxx, as Trustee of The Xxxxxxx Xxxx Irrevocable Trust u/a dated
3/24/99 f/b/o Xxxxxxx Xxxx Xxxx.
21. Xxxxx Xxxxxxxxx
22. Xxxxx X. Xxxxx, III
23. Xxxxxx Xxxxxx
-i-
