EXHIBIT 10.30
EXECUTION COPY
INVESTORS' RIGHTS AGREEMENT
INVESTORS' RIGHTS AGREEMENT, dated as of the 1st day of March 1999, by and
among Xxxx.xxx, Inc. (formerly named iNAME, INC.), a Delaware corporation (the
"Company"), doing business at 00 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx, the
undersigned holders of the Warrants and their nominees, successors and assigns
(the "Warrantholders"), and Xxxxxx Xxxxxx, residing at 000 Xxxxxxxxxxxxx Xxxx,
Xxxxxxx, Xxx Xxxxxx, in his capacities as holder of Class A Preferred Stock,
Class B Common Stock and controlling stockholder (the "Controlling
Stockholder"). The Company, the Controlling Stockholder and the Warrantholders
are collectively referred to as the "Parties."
WHEREAS, the Company has issued Warrants to the Warrantholders as
represented by the Warrants to Purchase Capital Stock dated as of the date
hereof (the "Warrant Certificates"); and
WHEREAS, in order to induce the Warrantholders to take delivery of the
Warrant Certificates, the Warrantholders and the Company agree that this
Agreement shall govern the rights of the Warrantholders and the Company with
respect to the subject matter set forth herein and in connection with the terms
and provisions as set forth herein;
NOW, THEREFORE, in consideration of the promises and mutual agreements
hereinafter contained, the Parties do hereby agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 DEFINITIONS. The following terms, as used herein, shall have
the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such Person.
"Agreement" means this Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"Class A Common Stock" means the shares of Class A Common Stock that the
Company is authorized to issue by way of the Company's Amended and Restated
Certificate of Incorporation, and amendments thereto.
"Class A Preferred Stock" means the shares of Class A Preferred Stock that
the Company is authorized to issue by way of the Company's Amended and Restated
Certificate of Incorporation, and amendments thereto.
"Class B Common Stock" means the shares of Class B Common Stock that the
Company is authorized to issue by way of the Company's Amended and Restated
Certificate of Incorporation, and amendments thereto.
"Class C Preferred Stock" means the shares of Class C Preferred Stock that
the Company is authorized to issue by way of the Company's Amended and Restated
Certificate of Incorporation, and amendments thereto.
"Company Stock" means any shares of any class of authorized capital stock
in the Company.
"Controlling Stockholder" has the meaning set forth in the preface above.
"Incidental Registration" has the meaning set forth in Section 2.1.1. of
this Agreement.
"Indemnified Party" and "Indemnifying Party" has the meaning set forth in
Section 2.6. of this Agreement.
"Other Shareholders' Consent" means the consent by the holders of Class A
Preferred Stock purchased pursuant to the Class A Preferred Stock Purchase
Agreement and by the holders of the Class C Preferred Stock purchased pursuant
to the Class C Preferred Stock Purchase Agreement to the amendment of the
Consent, Amendment and Waiver and Investors' Rights Agreement dated as of July
31, 1998 among the Company and the investors signatory thereto (the "Preferred
Stock Investors' Rights Agreement") to permit, in connection with an Incidental
Registration, the Warrantholders to include their Registrable Securities on a
pro rata basis with such Class A Preferred Stock and/or Class C Preferred Stock
to the extent that such Class A Preferred Stock and/or Class C Preferred Stock
is included in such registration pursuant to incidental registration rights as
contemplated by clause (C) of Section 2.1.2. hereof and not demand registration
rights as contemplated by clause (A) of Section 2.1.2. hereof.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Registrable Securities" means (i) the Class A Common Stock issuable or
issued upon exercise of the Warrants (it being understood that if any of the
Warrants expire, in whole or in part, unexercised upon the Expiration Date as
defined in the Warrant Certificates, then the Class A Common Stock that is no
longer issuable as a result of such expiration shall not be deemed to be
Registrable Securities), (ii) any Class A Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect to, or
in exchange for or in replacement of the
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securities referenced in clauses (i) and (ii), and (iii) any other shares of
capital stock of the Company into or for which the securities referenced in
clause (i) and (ii) may be converted into or exchanged pursuant to a
recapitalization or reclassification of the Company's capital stock.
"SEC" means the Securities and Exchange Commission.
"Warrant Demand Registration" has the meaning set forth in Section 2.1.3.
of this Agreement.
"Warrantholders" has the meaning set forth in the preface above.
"Warrants" means the rights to purchase One Million Five Hundred Thousand
(1,500,000) shares of Class A Common Stock by the Warrantholders as represented
by the Warrant Certificates, as the same may be amended.
Section 1.2 OTHER TERMS. Other terms may be defined elsewhere in the text
of this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
Section 1.3 OTHER DEFINITIONAL PROVISIONS. The words "herein," "hereof,"
"hereto" and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa, and in such gender,
as the sense and circumstances require.
ARTICLE II
REGISTRATION RIGHTS
The Company and the Warrantholders covenant and agree as follows:
Section 2.1 REGISTRATION
2.1.1. INCIDENTAL REGISTRATION. If at any time the Company proposes to
register any Company Stock under the Act for its own account or for the
account of any of its stockholders, in connection with an underwritten
public offering of such Company Stock, on a form that would also permit
registration of the Registrable Securities, the Company shall, each such
time, give the Warrantholders not less than twenty (20) days written notice
of such proposed registration (the "Incidenta Registration"). Upon the
written request of the Warrantholders, given within twenty (20) days after
receipt of any such notice from the Company, the Company shall, subject to
Section 2.1.2., cause to be included in such registration all of the
Registrable Securities the Warrantholders request be registered in such
registration. There shall be no restriction with respect to the number of
times the Warrantholders may request such Incidental Registration.
2.1.2. PRO RATA INCIDENTAL REGISTRATION OF COMPANY STOCK. If the
managing underwriter of any offering described in the first sentence of
Section 2.1.1. determines that the number of shares proposed to be sold by
the Company or by other stockholders of Company
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Stock is greater than the number of shares that the underwriter believes
feasible to sell at the time, at the price and upon the terms approved by
the Company, then the number of shares of Company Stock that the
underwriter believes may be sold shall be allocated for inclusion in the
registration statement in the following order of priority: (A) Company
Stock sold for the account of any holders of the Company's securities if
the registration was initiated by such holders pursuant to contractual
demand registration rights and Company Stock sold for the account of Lycos,
Inc. ("Lycos"), pursuant to contractual incidental registration rights that
permit it to participate in such an offering on a pro rata basis with such
holders, pro rata among such holders and Lycos according to the number of
shares requested to be registered by such holders and Lycos; (B) Company
Stock sold for the account of the Company; and (C) (x) if the Other
Shareholders' Consent is obtained on or before the consummation of the
Company's initial public offering, pro rata among any other holders of
securities of the Company exercising contractual incidental registration
rights (other than holders described in clause (A) above if pursuant to a
demand right and other than Lycos as described in clause (A) above) and the
Warrantholders according to the number of shares requested to be registered
by such other holders and the Warrantholders; provided, however, that (1)
as between the Company, on the one hand, and the Warrantholders and other
holders referred to in clause (C) above, on the other hand, at least ten
percent (10%) of the Warrantholders' Registrable Securities and of such
other holders' registrable securities requested to be included shall be
included in such underwriting (other than the initial underwriting); and
(2) the right of such other holders and the Warrantholders to participate
in the offering shall have priority over Class A Common Stock held by
employees of the Company and Class B Common Stock held by employees of the
Company or (y) if the Other Shareholders' Consent is not obtained on or
before the consummation of the Company's initial public offering, pro rata
among any other holders of securities of the Company exercising contractual
incidental registration rights (other than holders described in clause (A)
above if pursuant to a demand right and other than Lycos as described in
clause (A) above) and, subject to the provisos set forth in clauses (1) and
(2) below, the Warrantholders according to the number of shares requested
to be registered by such other holders and the Warrantholders; provided,
however, that (1) as between the Company, on the one hand, and the holders
of Class A Preferred Stock purchased pursuant to the Class A Preferred
Stock Purchase Agreement, the holders of Class C Preferred Stock purchased
pursuant to the Class C Preferred Stock Purchase Agreement and the
Warrantholders, on the other hand, at least ten percent (10%) of such
holders' registrable securities requested to be included shall be included
in such underwriting (other than the initial underwriting); (2) the right
of the holders of the Class A Preferred Stock and the holders of the Class
C Preferred Stock to participate in such underwriting shall have priority
over the Warrantholders, the holders of Class A Common Stock and the
holders of Class B Common Stock; and (3) the right of the holders of any
Company Stock held by Persons who are not employees of the Company shall
have priority over Class A Common Stock held by employees of the Company
and Class B Common Stock held by employees of the Company. If any
Warrantholder disapproves of the terms of the underwriting, it may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter; provided, however, the election to withdraw occurs within ten
(10) days after such Warrantholder receives notice of the terms of the
underwriting.
2.1.3. DEMAND REGISTRATION. On or after the earlier of (A) 180 days
after the effective date of a registration statement filed by the Company
in connection with an initial
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public offering of any Company Stock or other securities under the Act,
or (B) July 31, 2000, then, upon written request of the holder or
holders of a majority of the Registrable Securities that the Company
effect the registration under the Act of all or a portion of the
Registrable Securities and specifying the intended method of disposition
thereof, the Company shall, within fifteen (15) days after the Company
has received such written notice, promptly commence and use its best
efforts to consummate the registration under the Act of the Registrable
Securities, or such portion thereof, and of all other stock or
securities which the Company has been requested to register by any other
holder of the Company's securities that is entitled to include
securities in such registration (the "Warrant Demand Registration");
provided, however, that (1) the Warrantholders shall be entitled to
request one (1) Warrant Demand Registration, provided that either (a)
the Registrable Securities requested to be included in such Warrant
Demand Registration constitute at least twenty percent (20%) of the
total number of Registrable Securities issued hereunder or (b) the
anticipated gross receipts (before underwriters discounts and
commissions and costs of such registration) from the offering exceed ten
million dollars ($10,000,000), (2) a registration will not count as the
permitted Warrant Demand Registration until it has become effective, (3)
the Company may delay the filing of a registration statement under the
Act as required by this Section 2.1.3. for a period of up to sixty (60)
days after the request of the Warrantholders if the Board of Directors
of the Company determines in good faith that such Warrant Demand
Registration would be materially adverse to the interests of the
Company, and in such event, the Warrantholders will be entitled to
withdraw such request and such Warrant Demand Registration will not be
counted as the Warrant Demand Registration hereunder (provided, however,
that the Company shall not use this right more than once in any one
hundred eighty (180) day period) and (4) the Company will not be
required to effect a Warrant Demand Registration within six (6) months
after the effective date of a registration in which the Warrantholders
were given registration rights pursuant to Section 2.1.1. In the event
that the Warrantholders exercise the demand registration right
hereunder, and shares requested to be registered by Lycos in connection
therewith are included in such registration on a pro rata basis with the
Warrantholders' Registrable Securities, pursuant to section 11 of the
letter agreement between Lycos and the Company dated March 9, 1998 or
otherwise, account for thirty percent (30%) or more of the shares
offered in such registered offering, then the Warrantholders shall have
the right to one (1) additional Warrant Demand Registration hereunder.
2.1.4. PRO RATA DEMAND REGISTRATION OF COMPANY STOCK. (a) In the event
a Warrant Demand Registration is initiated subsequent to the initial public
offering of any Company Stock or other securities under the Act and such
Demand Registration is an underwritten offering, and the managing
underwriter advises the Warrantholders and the Company in writing that in
the underwriter's opinion the number of shares requested to be included
exceeds the number that can be sold in such offering, then the number of
shares of Company Stock that the underwriter believes may be sold shall be
allocated for inclusion in the registration statement in the following
order of priority: (A) shares requested to be included by the
Warrantholders, together with the shares requested to be included by Lycos
to the extent Lycos is entitled to participate in such offering on a pro
rata basis with the Warrantholders, as applicable, pursuant to contractual
incidental registration rights, that in the opinion of such underwriter can
be sold prior to the inclusion of any securities of any other security
holder of the Company; provided that, if the managing underwriter advises
the Company in writing that in its opinion the aggregate number of shares
requested for inclusion by the Warrantholders, together
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with such shares of Lycos, exceeds the number of such shares that can be
sold in such offering, then the Company shall include in the registration
statement only such number of shares, pro rata among Warrantholders and
Lycos, based upon the number of shares requested to be registered by the
Warrantholders and Lycos, which in the opinion of such underwriter can be
sold; (B) shares sold for the account of the Company; and (C) pro rata
among any other holders of securities of the Company exercising contractual
incidental registration rights other than any holders whose shares are
included pursuant to clause (A) above.
(b) In the event a Warrant Demand Registration is initiated prior to
the Company giving notice under Section 2.1.1. that it proposes to register
any Company Stock under the Act in its initial public offering of any
Company Stock or other securities under the Act and such Warrant Demand
Registration is an underwritten offering, and the managing underwriter
advises the Warrantholders and the Company in writing that in the
underwriter's opinion the number of shares requested to be included exceeds
the number that can be sold in such offering, then the number of shares of
Company Stock that the underwriter believes may be sold shall be allocated
for inclusion in the registration statement in the following order of
priority: (A) shares requested to be included by the Warrantholders
together with the shares requested to be included by Lycos to the extent
Lycos is entitled to participate in such offering on a pro rata basis with
the Warrantholders pursuant to contractual incidental registration rights,
that in the opinion of such underwriter can be sold prior to the inclusion
of any securities of any other security holder of the Company; provided
that, if the managing underwriter advises the Company in writing that in
its opinion the aggregate number of shares requested for inclusion by the
Warrantholders, together with such shares of Lycos, exceeds the number of
such shares that can be sold in such offering, then the Company shall
include in the registration statement only such number of shares, pro rata
among the Warrantholders and Lycos, based upon the number of shares
requested to be registered by the Warrantholders and Lycos, which in the
opinion of such underwriter can be sold; (B) pro rata among the
Warrantholders and any other holders of securities of the Company
exercising contractual incidental registration rights other than any
holders whose shares are included pursuant to clause (A) above; and (C)
shares sold for the account of the Company.
(c) If the Warrantholders make a written request to exercise rights to
a Warrant Demand Registration under Section 2.1.3. prior to any other
holder of securities making a written request to exercise contractual
rights to a demand registration, then the registration following from such
request shall be a Warrant Demand Registration. If any other holder of
securities makes a written request to exercise contractual rights to a
demand registration prior to the Warrantholders making a written request to
exercise rights to a Warrant Demand Registration under Section 2.1.3., then
the registration following from such request shall not be a Warrant Demand
Registration.
2.1.5. FORM S-3 DEMAND REGISTRATION RIGHTS. If at any time the holders
of a majority in interest of the Warrants held by the Warrantholders
request that the Company effect a Form S-3 registration under the Act of
all or a portion of the Registrable Securities, the Company shall, within
fifteen (15) days after the Company has received such written notice,
promptly commence and use its best efforts to consummate the Form S-3
registration of the Registrable Securities under the Act; provided,
however, (A) the aggregate fair market value of the Registrable Securities
requested to be registered shall be greater than two million dollars
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($2,000,000), (B) the Company shall only be required to file one Form S-3
registration every twelve (12) months, and (C) the Warrantholders who
request that the Company effect a Form S-3 registration shall not be
required to participate in such Form S-3 registration.
2.1.6. BENEFIT OF MORE FAVORABLE RIGHTS. If at any time registration
rights are granted with respect to Company Stock or capital stock of any
Affiliate of the Company which are on terms more favorable to the holders
of such securities with respect to any material terms applicable thereto
including, without limitation, the number of times or the circumstances
under which such rights may be exercised, the expenses to be paid by the
Company or any Affiliate of the Company in connection therewith or the
duration of the availability of such rights, the Company agrees that such
more favorable terms will be exercisable by the Warrantholders
automatically and without further action by the Company. The Company
covenants to give written notice to the Warrantholders not less than ten
(10) days in advance of the granting of registration rights with respect to
Company Stock or capital stock of any Affiliate of the Company.
2.1.7. TERMINATION OF REGISTRATION RIGHTS. Upon the date which is
thirty (30) months following a firm commitment underwritten public offering
pursuant to a registration statement under the Act, with gross proceeds of
not less than twenty million dollars ($20,000,000) (a "Qualified
Offering"), then the Warrantholders shall not be entitled to exercise any
right provided for in this Section 2.1.
Section 2.2 OBLIGATIONS OF THE COMPANY. Where required under Section 2.1.
to use its best efforts to effect the registration of any of the
Registrable Securities, the Company shall, as expeditiously as reasonably
possible,
2.2.1. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective and, upon the request of
the holders of a majority of the Registrable Securities, keep such
registration statement effective for up to one hundred twenty (120) days;
2.2.2. 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 comply with the provisions of the Act with
respect to the disposition of all securities covered by such registration;
2.2.3. Furnish to the Warrantholders such numbers of copies of such
registration statement and prospectus, including any preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as the Warrantholders may reasonably request in order to
facilitate the disposition of the Registrable Securities;
2.2.4. Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement; and
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2.2.5. Otherwise comply with all applicable rules and regulations of
the SEC.
Section 2.3 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2 that the
Warrantholders shall furnish to the Company such information regarding the
Warrantholders, the Registrable Securities held by the Warrantholders, and the
intended method of disposition thereof as the Company or its appointed agents
shall reasonably request and as shall be required in connection with the action
to be taken by the Company.
Section 2.4 REGISTRATION EXPENSES. In the case of any registration effected
pursuant to Section 2, the Company shall bear all registration and qualification
fees and expenses, and all costs and disbursements of counsel for the Company;
provided, however, that (A) each Warrantholder shall bear the fees and costs of
such Warrantholder's own counsel and all underwriting discounts and commissions
with respect to the Registrable Securities sold by such Person and (B) the
Company shall not be required to pay for any expenses of any Warrant Demand
Registration begun if the registration request is subsequently withdrawn at the
request of a majority in interest of the Warrantholders to be registered (in
which case all participating Warrantholders shall bear such expenses); provided
that, if the Warrantholders elect to engage counsel other than counsel for the
Company in connection with a Warrant Demand Registration, the Company shall bear
the fees and expenses, and all costs and disbursements of one firm to act as
such counsel to all Warrantholders up to a maximum aggregate amount of fifteen
thousand dollars ($15,000).
Section 2.5 SELECTION OF UNDERWRITERS.
2.5.1. COMPANY SELECTION. If a registration pursuant to Section 2.1.1.
of this Agreement involves an underwritten offering, the Company shall have
the right to select the investment bankers and managers to administer the
offering. The Company shall not be required under Section 2.1.1. to
register the Warrants in such registration unless the Warrantholders accept
the terms of the underwriting as agreed upon between the Company and the
underwriter.
2.5.2. WARRANTHOLDERS' SELECTION. If a registration pursuant to
Section 2.1.3. or 2.1.5. involves an underwritten offering, then the
Warrantholders shall have the right to select the investment bankers and
managers to administer the offering; provided, however, that the selection
of such investment bankers and managers shall be subject to the approval of
the Company, such approval not to be unreasonably withheld.
Section 2.6 INDEMNIFICATION. If any Registrable Securities are included in
a registration statement pursuant to this Section 2, then,
2.6.1. To the extent permitted by law, the Company shall indemnify and
hold harmless the Warrantholders, agents for the Warrantholders, any
underwriter for the Warrantholders, and each Person, if any, who controls
such Person within the meaning of the Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject
under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities arise out of any untrue statement or alleged untrue statement
of material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained in the
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registration statement, or any amendments or supplements to the
registration statement, 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, and
will reimburse the Warrantholders, the agents for the Warrantholders, such
underwriter, or controlling Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any
untrue statement or omission based upon and in conformity with written
information furnished to the Company by an instrument duly executed by the
Warrantholders or underwriter and stated to be specifically for use
therein.
2.6.2. To the extent permitted by law, each Warrantholder, severally
and not jointly, shall indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed such registration
statement, and any underwriter for the Company against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
or underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained in the registration statement or any amendments or
supplements to the registration statement, 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 statement therein
not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary prospectus,
or amendments or supplement thereto, in reliance upon and in conformity
with written information furnished by such Warrantholder duly executed and
stated to be expressly for use therein, and such Warrantholder will
reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, controlling Person, or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, that such Warrantholder's liability under
this Section 2.6.2. shall not exceed the amount of the gross proceeds of
the offering of such Warrantholder's Registrable Securities included
therein.
2.6.3. Each party entitled to indemnification (the "Indemnified
Party") shall give notice to the party required to provide indemnification
("Indemnifying Party") promptly after such Indemnified Party has knowledge
of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party (at its expense) to assume the defense of any such claim
or any litigation resulting therefrom; provided, however, that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be reasonably satisfactory to the Indemnified Party, and
the Indemnified Party may participate in such defense at such party's
expense; provided, further, that the failure by any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 2.6., except to the extent that the
failure results in an omission of actual notice to the Indemnifying Party
and such Indemnifying Party is damaged solely as a result of the failure to
give notice; provided, further, that a refusal to permit the Indemnifying
Party to conduct such defenses by such counsel shall relieve such
Indemnifying Party of its obligations under this Section 2.6. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each
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Indemnified Party, consent to the entry of any judgment or enter into any
settlement that does not include as an unconditional term the giving by the
claimant or plaintiff to such Indemnified Party of a release from all
liability with respect to such claim or litigation.
Section 2.7 REPORTS UNDER THE SECURITIES EXCHANGE ACT OF 1934. With a view
toward making available to the Warrantholders the benefits of SEC Rule 144
promulgated under the Act and any other rule or regulation of the SEC that may
at any time permit the Warrantholder to sell its Registrable Securities to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(i) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its shares to the general public;
(ii) take such action, including the voluntary registration of its
common stock under Section 12 of the Securities Exchange Act of 1934, as is
necessary to enable the holders of Registrable Securities to utilize Form
S-3 for the sale of their shares, such action to be taken as soon as
practicable after the end of the fiscal year in which the first
registration statement filed by the Company for the offering of its shares
to the general public is declared effective;
(iii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Securities Exchange
Act of 1934; and
(iv) furnish to any holder of the Registrable Securities, so long as
the holder of the Registrable Shares owns any shares, forthwith upon
request (i) a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 (at any time after ninety (90) days
after the effective date of the first registration statement filed by the
Company), the Act and the Securities Exchange Act of 1934 (at any time
after it has become subject to such reporting requirements), or as to its
qualification that it qualifies as a registrant whose shares may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of
the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any holder of
Registrable Securities of any rule or regulation of the SEC which permits
the selling of any such shares without registration or pursuant to such
form.
Section 2.8 LOCK-UP PERIOD. Each Warrantholder agrees that it shall not, to
the extent requested by the underwriter of the Company, sell or otherwise
transfer or dispose of any Registrable Securities or any securities of the same
or similar class as securities being registered by the Company during the one
hundred eighty (180) day period following the effective date of a registration
statement filed by the Company; provided, however, that (A) such agreement shall
be applicable only to the first registration statement of the Company that
covers shares of the Company to be sold to the public in an underwritten
offering, (B) the holders of Class B Common Stock and the holders of at least
ninety percent (90%) of Class A Common Stock are subject to identical or
substantially similar time restrictions, (C) all officers and directors of the
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Company and all other persons with registration rights enter into substantially
similar agreements, and (D) nothing contained herein shall prohibit any holder
of Company Stock from transferring any Registrable Securities to a trust
established for estate planning purposes. Notwithstanding anything to the
contrary set forth herein, the terms of this Section 2.8 may not be amended or
modified, directly or indirectly, without the express written consent of each
holder of Registrable Securities detrimentally affected by such amendment or
modification and any such amendment or modification made without such holder's
consent shall not be applicable to that holder.
Section 2.9 TRANSFER OF REGISTRATION RIGHTS. The registration rights of the
Warrantholders under this Section 2 may be assigned and transferred (i) by any
Warrantholder to any Affiliate of such Warrantholder to whom any of the shares
owned by the Warrantholder are transferred, and (ii) by any Warrantholder to any
transferee who acquires at least five thousand (5,000) Registrable Securities
(adjusted to reflect subsequent stock splits, combinations, stock dividends and
recapitalizations); provided, however, that the Company is given written notice
by such Warrantholder at the time of such assignment and transfer stating the
name and address of the transferee and identifying the securities with respect
to which the rights under this Section 2 are being assigned and transferred. For
the purposes of this Section 2.9, a change in control of an Affiliate of a
Warrantholder holding shares entitling such Affiliate to the registration rights
hereunder, such that such Affiliate is subsequent to such change of control no
longer an Affiliate of such Warrantholder, shall be deemed an attempted transfer
of the registration rights hereunder and such former Affiliate of such
Warrantholder shall not be entitled to such registration rights except to the
extent such transfer would be permitted under clause (ii) above.
ARTICLE III
MISCELLANEOUS
Section 3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the Parties (including
permitted transferees of any shares of Registrable Securities). Without limiting
any other rights of transfer herein (including Section 2.9), each Warrantholder
may transfer, assign and convey its shares of capital stock of the Company and
its rights and obligations thereunder to an Affiliate of such Warrantholder, and
such Affiliate shall be deemed to be a "Warrantholder" for purposes of
construction of this Agreement. Nothing in this Agreement is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liability under or by reason of
this Agreement, except as expressly provided in this Agreement.
Section 3.2 NOTICES. All notices and other communications under this
Agreement shall (a) be in writing (which shall include communications by
telecopy), (b) be (i) sent by registered or certified mail, postage prepaid,
return receipt requested, (ii) sent by telecopier, or (iii) delivered by hand,
(c) be given at the following respective addresses and telecopier numbers and to
the attention of the following persons:
(i) If to the Company, to it at:
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Xxxx.xxx, Inc.
00 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx, President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Law Offices of Xxxxx X. Xxxxxx
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
and to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(ii) if to the Warrantholders, to them at their respective
addresses as set forth in Schedule A,
or at such other address or telecopier number or to the attention of such other
person as the party to whom such information pertains may hereafter specify for
the purpose in a notice to the other, and (d) be effective or deemed delivered
or furnished (i) if given by mail, on the fifth business day after such
communication is deposited in the mail, addressed as above provided, (ii) if
given by telecopier, when such communication is transmitted to the appropriate
number determined as above provided in this Section 3.2 and the appropriate
answer back is received or receipt is otherwise acknowledged, and (iii) if given
by hand delivery, when left at the address of the addressee addressed as above
provided. The foregoing addresses may be changed by notices given in the manner
set forth in this section.
Section 3.3 GOVERNING LAW; FORUM AND CONSENT TO JURISDICTION.
12
(a) GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of Delaware without
giving effect to the principles of the conflict of laws thereof.
(b) FORUM AND CONSENT TO JURISDICTION. Each party hereto submits to the
nonexclusive jurisdiction of the courts of the State of New York and the federal
courts of the United States of America located in such state solely in respect
of the interpretation and enforcement of the provisions of this Agreement, and
the other instruments, agreements and documents to be delivered pursuant hereto,
and hereby waives, and agrees not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement of this Agreement or any of
such instruments, agreements and documents, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that this Agreement or any of such other instruments,
agreements and documents may not be enforced in or by said courts or that its
property is exempt or immune from execution, that the suit, action or proceeding
is brought in an inconvenient forum, or that the venue of the suit, action or
proceeding is improper. Each party hereto agrees that service of process may be
made upon it by service upon The Xxxxxxxx-Xxxx Corporation System, Inc. ("PHCS")
at its office in New York City in any such action, suit or proceeding against
such party with respect to this Agreement or any other agreements relating
hereto, and hereby irrevocably designates and appoints PHCS as its authorized
agent upon which process may be served in any such action, suit or proceeding,
it being understood that such appointment and designation shall become effective
without any further action on the part of any party. Service of process upon
such authorized agent shall be deemed, in every respect, effective service of
process upon the applicable party. If PHCS ceases to maintain an office in New
York City, then each party shall appoint another agent for service of process in
the State of New York acceptable to the others. A copy of any complaint or other
item served pursuant to this Section shall also be sent at the same time to the
party or parties designated for notice at the addresses and in the manner
specified in Section 3.2. Each party hereto agrees that final judgment (with all
right of appeal having expired or been waived) against it in any such action,
suit or proceeding shall be conclusive and that each party is entitled to
enforce such judgment in any other jurisdiction by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and amount of indebtedness arising from such judgment.
Section 3.4 WAIVERS; AMENDMENTS. The waiver by the undersigned of any of
the provisions of this Agreement or the Warrant Certificates shall not operate
or be construed as a waiver of any subsequent breach. This Agreement or the
Warrant Certificates may be amended, and any provision of this Agreement may be
waived, only by a written amendment executed by (i) the Company, (ii) the
Controlling Stockholder and (iii) in the case of any amendment affecting the
rights or obligations of the Warrantholders, the holders of a majority in
interest of the outstanding Warrants issued to the Warrantholders or stock
issuable upon exercise of such Warrants. Notwithstanding the foregoing, the
Company will provide each Warrantholder with written notice and sufficient
information, sufficiently far in advance of a date a decision is required, to
enable such Warrantholder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the
provisions hereof. The Company will not, directly or indirectly, pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, to any holder of capital stock of
13
the Company as consideration for or as an inducement to the entering into by any
such holder of any waiver or amendment to any of the terms and provisions of
this Agreement, unless prior to the payment of any remuneration to any holder of
capital stock of the Company, the Warrantholders shall, ratably, have been
offered the opportunity to provide any such waiver or amendment upon the same
financial terms and conditions (including but not limited to the time specified
by which a consent to such waiver or amendment must be given) as any holder of
capital stock who has consented to the waiver or amendment of any of the terms
of this Agreement. No waiver or amendment of the provisions in the preceding
sentence shall be effective with respect to any Warrantholder unless consented
to in writing by such Warrantholder.
Section 3.5 HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect the construction and
interpretation of this Agreement
Section 3.6 SEVERABILITY. The invalidity of all or any part of any section
of this Agreement shall not render invalid the remainder of such section. If any
provision of this Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable.
Section 3.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. This Agreement may contain more than one
counterpart of the signature page and may be executed by the affixing of the
signatures of each of the Parties to one of these counterpart signature pages.
All of the counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 3.8 AGGREGATION OF STOCK. All shares of Registrable Securities held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
Section 3.9 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
Section 3.10 ENTIRE AGREEMENT. This Agreement and the Warrant Certificates
contain the entire agreement of the Parties. The Parties are not bound by any
oral statements that are made outside of this Agreement.
14
WHEREAS, the Parties have executed this Agreement as of the date first
above written:
XXXX.XXX, INC.
/s/ Xxxx Xxxxxx
----------------------------------------
By: Xxxx Xxxxxx
Title: President
CNET, INC., as Warrantholder
/s/ Xxxxxxx Xxxxxxx
-----------------------------------------
By: Xxxxxxx Xxxxxxx
Title: CFO
NBC MULTIMEDIA, INC., as Warrantholder
/s/ Xxxxxxxxxxx X. Xxxxxxxx
-----------------------------------------
By: Xxxxxxxxxxx X. Xxxxxxxx
Title: Vice President
EXHIBIT A TO INVESTORS'
RIGHTS AGREEMENT
NOTICE ADDRESSES OF WARRANTHOLDERS
To CNET, Inc. at:
CNET, Inc.
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxx, LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: R. Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
To NBC Multimedia, Inc. at:
NBC Multimedia, Inc.
c/o National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
