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EXHIBIT 10.1
STOCK OPTION AGREEMENT (the "Agreement"), dated as of June 13, 1999, by
and between, DoubleClick Inc., a Delaware corporation ("Parent"), and Abacus
Direct Corporation, a Delaware corporation ("Company"). Capitalized terms used
herein but not defined herein shall have the meanings set forth in the Merger
Agreement referred to below.
WHEREAS, concurrently with the execution and delivery of this
Agreement, Company, Parent and Atlanta Merger Corp., a Delaware corporation and
wholly-owned subsidiary of Parent ("Merger Sub"), are entering into an Agreement
and Plan of Merger and Reorganization, dated as of the date hereof (the "Merger
Agreement"), pursuant to which, among other things, upon the terms and subject
to the conditions thereof, Merger Sub will be merged with and into Company (the
"Merger"), with Company continuing as the surviving corporation; and
WHEREAS, as a condition and inducement to Parent's willingness to enter
into the Merger Agreement, Parent has required that Company agree, and Company
has agreed, to grant to Parent an option to purchase certain newly issued shares
of Company's Common Stock, par value $.001 per share ("Company Common Stock"),
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
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1. GRANT OF OPTION. COMPANY HEREBY GRANTS TO PARENT AN IRREVOCABLE OPTION (THE
"COMPANY OPTION") TO PURCHASE UP TO 1,974,516 SHARES (THE "COMPANY SHARES") OF
COMPANY COMMON STOCK IN THE MANNER SET FORTH BELOW AT A PRICE (THE "EXERCISE
PRICE") OF $93.25 PER COMPANY SHARE, PAYABLE IN CASH; PROVIDED, HOWEVER, THAT
THE NUMBER OF SHARES ISSUABLE TO PARENT PURSUANT HERETO AND PURSUANT TO SECTION
9.05(e) OF THE MERGER AGREEMENT SHALL NOT EXCEED 19.99% OF THE OUTSTANDING
SHARES OF COMPANY COMMON STOCK.
2. EXERCISE OF OPTION. (a) THE COMPANY OPTION MAY BE EXERCISED BY PARENT, IN
WHOLE OR IN PART AT ANY TIME OR FROM TIME TO TIME AFTER (i) THE TERMINATION OF
THE MERGER AGREEMENT UNDER THE CONDITIONS DESCRIBED IN SECTION 9.05(b)(i) OR
9.05(d) OF THE MERGER AGREEMENT AND (ii) IMMEDIATELY PRIOR TO THE OCCURRENCE OF
ANY EVENT CAUSING THE TERMINATION FEE TO BECOME PAYABLE PURSUANT TO SECTION
9.05(b)(ii) OR SECTION 9.05 (c) OF THE MERGER AGREEMENT. IN THE EVENT PARENT
WISHES TO EXERCISE THE COMPANY OPTION, PARENT SHALL DELIVER TO COMPANY A WRITTEN
NOTICE (AN "EXERCISE NOTICE") SPECIFYING THE TOTAL NUMBER OF COMPANY SHARES IT
WISHES TO PURCHASE; PROVIDED THAT, IF PRIOR NOTIFICATION TO OR APPROVAL OF ANY
REGULATORY OR ANTITRUST AGENCY IS REQUIRED IN CONNECTION WITH SUCH PURCHASE,
PARENT SHALL PROMPTLY FILE THE REQUIRED NOTICE OR APPLICATION FOR APPROVAL,
SHALL PROMPTLY NOTIFY COMPANY OF SUCH FILING, AND SHALL EXPEDITIOUSLY PROCESS
THE SAME AND THE PERIOD OF TIME THAT OTHERWISE WOULD RUN PURSUANT TO THIS
SENTENCE SHALL RUN INSTEAD FROM THE DATE ON WHICH ANY REQUIRED NOTIFICATION
PERIODS HAVE EXPIRED OR BEEN TERMINATED OR SUCH APPROVALS HAVE BEEN OBTAINED AND
ANY REQUISITE WAITING PERIOD OR PERIODS SHALL HAVE PASSED. EACH CLOSING OF A
PURCHASE OF COMPANY SHARES (AN "OPTION CLOSING") SHALL OCCUR AT A PLACE, ON A
DATE AND AT A TIME DESIGNATED BY PARENT IN AN EXERCISE NOTICE DELIVERED AT LEAST
THREE BUSINESS DAYS PRIOR TO THE DATE OF THE OPTION CLOSING. THE COMPANY OPTION
SHALL TERMINATE UPON THE EARLIER OF: (w) THE EFFECTIVE TIME; (x) THE TERMINATION
OF THE MERGER AGREEMENT PURSUANT TO SECTION 9.01 THEREOF (OTHER THAN A
TERMINATION IN CONNECTION WITH WHICH PARENT IS OR MAY BE ENTITLED TO ANY
PAYMENTS AS SPECIFIED IN SECTION 9.05(b), 9.05(c) OR 9.05 (d) THEREOF); (y) 90
DAYS FOLLOWING ANY TERMINATION OF THE MERGER AGREEMENT IN CONNECTION WITH WHICH
PARENT IS ENTITLED TO A PAYMENT AS SPECIFIED IN SECTION 9.05(b)(i) OR 9.05(d)
THEREOF (OR IF, AT THE EXPIRATION OF SUCH 90 DAY PERIOD, THE COMPANY OPTION
CANNOT BE EXERCISED BY REASON OF ANY APPLICABLE JUDGMENT, DECREE, ORDER, LAW OR
REGULATION, TWENTY (20) BUSINESS DAYS AFTER SUCH IMPEDIMENT TO EXERCISE SHALL
HAVE BEEN REMOVED OR SHALL HAVE BECOME FINAL AND NOT SUBJECT TO APPEAL); OR (z)
90 DAYS FOLLOWING THE OCCURRENCE OF ANY EVENT IN CONNECTION WITH WHICH PARENT
HAS BECOME ENTITLED TO PAYMENT OF THE TERMINATION FEE PURSUANT TO SECTION
9.05(b)(ii) OF THE MERGER AGREEMENT (OR (i) IF, AT THE EXPIRATION OF SUCH 90 DAY
PERIOD, THE COMPANY OPTION CANNOT BE EXERCISED BY REASON OF ANY APPLICABLE
JUDGMENT, DECREE, ORDER, LAW OR REGULATION, TWENTY (20) BUSINESS DAYS AFTER SUCH
IMPEDIMENT TO EXERCISE SHALL HAVE BEEN REMOVED OR SHALL HAVE BECOME FINAL AND
NOT SUBJECT TO APPEAL AND (ii) AT THE EXPIRATION OF THE 12-MONTH PERIOD
FOLLOWING TERMINATION OF
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THE MERGER AGREEMENT DESCRIBED IN SECTION 9.05(b)(ii) OR 9.05(c) IF THE EVENT
DESCRIBED THEREIN HAS NOT OCCURRED).
(b) Notwithstanding any other provision of this Agreement or the Merger
Agreement, in no event shall Parent's Total Profit (as hereinafter defined)
exceed in the aggregate $50,000,000 and, if it otherwise would exceed such
amount Parent, in its sole discretion, shall either (i) reduce the number of
Company Shares subject to the Company Option, (ii) pay cash to Company, (iii)
receive a smaller Termination Fee (as defined in Section 9.05(b)of the Merger
Agreement), (iv) deliver to Company for cancellation Company Shares previously
purchased by Parent or (v) any combination thereof, so that Parent's actually
realized Total Profit shall not exceed in the aggregate $50,000,000 after taking
into account the foregoing actions.
(c) As used herein, the term "TOTAL PROFIT" shall mean the sum of (i)
(x)the amount (before taxes but net of reasonable and customary commissions paid
or payable in connection with such transaction) received by Parent pursuant to
the sale of Company Shares less (y) Parent's purchase price for such Company
Shares, (ii) any amounts (before taxes but net of reasonable and customary
commissions paid or payable in connection with such transaction) received by
Parent on the transfer of the Company Option (or any portion thereof) to any
unaffiliated Person(s) (if permitted hereunder) or to Company and (iii) the
amount received by Parent pursuant to Section 9.05(b), 9.05(c) and 9.05(d) of
the Merger Agreement.
3. CONDITIONS TO CLOSING. THE OBLIGATION OF COMPANY TO ISSUE THE COMPANY SHARES
TO PARENT HEREUNDER IS SUBJECT TO THE CONDITIONS THAT (i) ALL CONSENTS,
APPROVALS, ORDERS OR AUTHORIZATIONS OF, OR REGISTRATIONS, DECLARATIONS OR
FILINGS WITH, ANY GOVERNMENTAL ENTITY OR REGULATORY ENTITY IF ANY, REQUIRED IN
CONNECTION WITH THE ISSUANCE OF THE COMPANY SHARES HEREUNDER SHALL HAVE BEEN
OBTAINED OR MADE, AS THE CASE MAY BE; AND (ii) NO PRELIMINARY OR PERMANENT
INJUNCTION OR OTHER ORDER BY ANY COURT OF COMPETENT JURISDICTION PROHIBITING OR
OTHERWISE RESTRAINING SUCH ISSUANCE SHALL BE IN EFFECT.
4. CLOSING. AT EACH OPTION CLOSING, (a) COMPANY WILL DELIVER TO PARENT A
CERTIFICATE OR CERTIFICATES IN DEFINITIVE FORM REPRESENTING THE NUMBER OF
COMPANY SHARES DESIGNATED BY PARENT IN ITS EXERCISE NOTICE, SUCH CERTIFICATE OR
CERTIFICATES TO BE REGISTERED IN THE NAME OF PARENT OR ITS DESIGNEE AND TO BEAR
THE LEGEND SET FORTH IN SECTION 10, AND (b) PARENT WILL DELIVER TO COMPANY THE
AGGREGATE EXERCISE PRICE FOR THE COMPANY SHARES SO DESIGNATED BY WIRE TRANSFER
OF IMMEDIATELY AVAILABLE FUNDS OR CERTIFIED CHECK OR BANK CHECK. AT ANY OPTION
CLOSING AT WHICH PARENT IS EXERCISING THE COMPANY OPTION IN PART, PARENT SHALL
PRESENT AND SURRENDER THIS AGREEMENT TO COMPANY, AND COMPANY SHALL DELIVER TO
PARENT AN EXECUTED NEW AGREEMENT WITH THE SAME TERMS AS THIS AGREEMENT
EVIDENCING THE RIGHT TO PURCHASE THE REMAINING BALANCE OF THE SHARES OF COMPANY
COMMON STOCK PURCHASABLE HEREUNDER.
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5. REPRESENTATIONS AND WARRANTIES OF COMPANY. COMPANY REPRESENTS AND WARRANTS
TO PARENT THAT (a) COMPANY IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE AND HAS THE
CORPORATE POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO CARRY OUT ITS
OBLIGATIONS HEREUNDER, (b) THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY
COMPANY AND THE CONSUMMATION BY COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF
COMPANY AND OTHER THAN OBTAINING SHAREHOLDER APPROVAL, NO OTHER CORPORATE
PROCEEDINGS ON THE PART OF COMPANY ARE NECESSARY TO AUTHORIZE THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, (c) THIS AGREEMENT HAS BEEN DULY
EXECUTED AND DELIVERED BY COMPANY AND CONSTITUTES A VALID AND BINDING
OBLIGATION OF COMPANY, ENFORCEABLE AGAINST COMPANY IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM AND OTHER LAWS AFFECTING THE RIGHTS AND REMEDIES OF
CREDITORS GENERALLY AND GENERAL PRINCIPLES OF EQUITY, (d) COMPANY HAS TAKEN ALL
ACTION NECESSARY TO AUTHORIZE AND RESERVE FOR ISSUANCE AND TO PERMIT IT TO
ISSUE, UPON EXERCISE OF THE COMPANY OPTION, AND AT ALL TIMES FROM THE DATE
HEREOF THROUGH THE EXPIRATION OF THE COMPANY OPTION WILL HAVE RESERVED, THAT
NUMBER OF UNISSUED COMPANY SHARES THAT ARE SUBJECT TO THE COMPANY OPTION, ALL
OF WHICH, UPON THEIR ISSUANCE AND DELIVERY IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT, WILL BE VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE, (e) UPON
DELIVERY OF THE COMPANY SHARES TO PARENT UPON THE EXERCISE OF THE COMPANY
OPTION, PARENT WILL ACQUIRE THE COMPANY SHARES FREE AND CLEAR OF ALL LIENS,
CLAIMS, CHARGES, ENCUMBRANCES AND SECURITY INTERESTS OF ANY NATURE WHATSOEVER
EXCEPT THOSE IMPOSED BY PARENT, (f) EXCEPT AS DESCRIBED IN SECTION 4.05 OF THE
MERGER AGREEMENT AND OF THE COMPANY DISCLOSURE SCHEDULE, THE EXECUTION AND
DELIVERY OF THIS AGREEMENT BY COMPANY DOES NOT, AND THE PERFORMANCE OF THIS
AGREEMENT BY COMPANY WILL NOT, CONFLICT WITH, OR RESULT IN ANY VIOLATION OF, OR
DEFAULT (WITH OR WITHOUT NOTICE OR LAPSE OF TIME, OR BOTH) UNDER, OR GIVE RISE
TO A RIGHT OF TERMINATION, CANCELLATION OR ACCELERATION OF ANY OBLIGATION OR
THE LOSS OF A BENEFIT UNDER, OR THE CREATION OF A LIEN, PLEDGE, SECURITY
INTEREST OR OTHER ENCUMBRANCE ON ASSETS PURSUANT TO (ANY SUCH CONFLICT,
VIOLATION, DEFAULT, RIGHT OF TERMINATION, CANCELLATION OR ACCELERATION, LOSS OR
CREATION, A "VIOLATION"), (A) ANY PROVISION OF THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OR BY-LAWS, EACH AS AMENDED, OF COMPANY OR (B) ANY
PROVISIONS OF ANY MATERIAL MORTGAGE, INDENTURE, LEASE, CONTRACT OR OTHER
AGREEMENT, INSTRUMENT, PERMIT, CONCESSION, FRANCHISE, OR LICENSE OR (C) ANY
JUDGMENT, ORDER, DECREE, STATUTE, LAW, ORDINANCE, RULE OR REGULATION APPLICABLE
TO COMPANY OR ITS PROPERTIES OR ASSETS, EXCEPT IN THE CASE OF CLAUSES (B) AND
(C) IMMEDIATELY ABOVE, FOR VIOLATIONS WHICH WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE A COMPANY MATERIAL ADVERSE EFFECT AND (g) EXCEPT AS DESCRIBED
IN SECTION 4.05 OF THE MERGER AGREEMENT AND OF THE COMPANY DISCLOSURE SCHEDULE,
THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY COMPANY DOES NOT, AND THE
PERFORMANCE OF THIS AGREEMENT BY COMPANY WILL NOT, REQUIRE ANY CONSENT,
APPROVAL, AUTHORIZATION OR PERMIT OF, OR FILING WITH OR NOTIFICATION TO, ANY
GOVERNMENTAL ENTITY OR REGULATORY ENTITY.
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6. REPRESENTATIONS AND WARRANTIES OF PARENT. PARENT REPRESENTS AND WARRANTS TO
COMPANY THAT (a) PARENT IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE AND HAS THE CORPORATE
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO CARRY OUT ITS
OBLIGATIONS HEREUNDER, (b) THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY
PARENT AND THE CONSUMMATION BY PARENT OF THE TRANSACTIONS CONTEMPLATED HEREBY
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF
PARENT AND NO OTHER CORPORATE PROCEEDINGS ON THE PART OF PARENT ARE NECESSARY
TO AUTHORIZE THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, (c)
THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY PARENT AND CONSTITUTES A
VALID AND BINDING OBLIGATION OF PARENT, ENFORCEABLE AGAINST PARENT IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY BE LIMITED BY
BANKRUPTCY AND OTHER LAWS AFFECTING THE RIGHTS AND REMEDIES OF CREDITORS
GENERALLY AND GENERAL PRINCIPLES OF EQUITY, (d) ASSUMING THAT THE CONSENTS,
APPROVALS, AUTHORIZATIONS, PERMITS, FILINGS AND NOTIFICATIONS REFERRED TO IN
SUBSECTION (e) ARE OBTAINED OR MADE, AS APPLICABLE, THE EXECUTION AND DELIVERY
OF THIS AGREEMENT BY PARENT DOES NOT, AND THE PERFORMANCE OF THIS AGREEMENT BY
PARENT WILL NOT, RESULT IN ANY VIOLATION PURSUANT TO, (A) ANY PROVISION OF THE
CERTIFICATE OF INCORPORATION OR BY-LAWS, EACH AS AMENDED, OF PARENT, (B) ANY
PROVISIONS OF ANY MATERIAL MORTGAGE, INDENTURE, LEASE, CONTRACT OR OTHER
AGREEMENT, INSTRUMENT, PERMIT, CONCESSION, FRANCHISE, OR LICENSE OR (C) ANY
JUDGMENT, ORDER, DECREE, STATUTE, LAW, ORDINANCE, RULE OR REGULATION APPLICABLE
TO PARENT OR ITS PROPERTIES OR ASSETS, EXCEPT IN THE CASE OF EACH OF CLAUSES
(B) AND (C) IMMEDIATELY, ABOVE, FOR VIOLATIONS WHICH WOULD NOT, INDIVIDUALLY OR
IN THE AGGREGATE, HAVE A PARENT MATERIAL ADVERSE EFFECT, (e) EXCEPT AS
DESCRIBED IN SECTION 5.05 OF THE MERGER AGREEMENT AND SECTION 3(a) OF THIS
AGREEMENT, AND EXCEPT AS MAY BE REQUIRED UNDER THE EXCHANGE ACT, THE EXECUTION
AND DELIVERY OF THIS AGREEMENT BY PARENT DOES NOT, AND THE PERFORMANCE OF THIS
AGREEMENT BY PARENT WILL NOT, REQUIRE ANY CONSENT, APPROVAL, AUTHORIZATION OR
PERMIT OF, OR FILING WITH OR NOTIFICATION TO, ANY GOVERNMENTAL ENTITY OR
REGULATORY ENTITY, (f) ANY COMPANY SHARES ACQUIRED UPON EXERCISE OF THE COMPANY
OPTION WILL NOT BE, AND THE COMPANY OPTION IS NOT BEING, ACQUIRED BY PARENT
WITH A VIEW TO THE PUBLIC DISTRIBUTION THEREOF AND PARENT WILL NOT SELL OR
OTHERWISE DISPOSE OF SUCH SHARES IN VIOLATION OF APPLICABLE LAW OR THIS
AGREEMENT, (g) THE COMPANY OPTION AND ANY COMPANY SHARES ACQUIRED UPON EXERCISE
OF THE COMPANY OPTION ARE BEING ACQUIRED FOR THE ACCOUNT OF PARENT, (h) IT IS
AN "ACCREDITED INVESTOR" AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT,
AND (i) IT UNDERSTANDS THAT THE COMPANY SHARES MAY NOT BE SOLD UNLESS SUCH SALE
IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.
7. PUT.
(a) Exercise. At any time during which the Company Option is
exercisable hereunder (the "Repurchase Period"), upon demand by Parent, Parent
shall have the right to sell to Company (or any successor entity thereof) and
Company (or such successor entity) shall be obligated to repurchase from Parent
(the "Put"), all or any portion of the Company Option, to the extent not
previously exercised, at the price set forth in subparagraph (i) below, and/or
all or any
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portion of the Company Shares purchased by Parent pursuant thereto, at a price
set forth in subparagraph (ii) below:
(i) the difference between the "Market/Tender Offer Price" for
shares of Company Common Stock as of the date (the "Notice Date") notice of
exercise of the Put is given to the other party (defined as the greater of
(A) the price per share offered as of the Notice Date pursuant to any
tender or exchange offer or other Takeover Proposal which was made prior to
the Notice Date and not terminated or withdrawn as of the Notice Date (the
"Tender Price") or (B) the average of the closing prices of shares of
Company Common Stock on the Nasdaq National Market for the ten (10) trading
days immediately preceding the Notice Date (the "Market Price")), and the
Exercise Price, multiplied by the number of Company Shares purchasable
pursuant to the Company Option (or portion thereof with respect to which
Parent is exercising its rights under this Section 7), but only if the
Market/Tender Offer Price is greater than the Exercise Price;
(ii) the Exercise Price paid by Parent for the Company Shares
acquired pursuant to the Company Option plus the difference between the
Market/Tender Offer Price and the Exercise Price, but only if the
Market/Tender Offer Price is greater than the Exercise Price, multiplied by
the number of Company Shares so purchased;
(b) Payment and Redelivery of Company Option or Shares. In the event
Parent exercises its rights under this Section 7, Company shall, within ten
business days of the Notice Date, pay the required amount (the "Repurchase
Price") to Parent in immediately available funds and Parent shall surrender to
Company the Company Option or the certificates evidencing the Company Shares
purchased by Parent pursuant thereto, and Parent shall represent and warrant
that it owns such shares and that such shares are then free and clear of all
liens, claims, charges and encumbrances of any kind or nature whatsoever, other
than any of the same created by Company or its affiliates.
(c) Payment Restrictions. To the extent that Company is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Company Option and /or Shares in full, Company
shall immediately so notify Parent and thereafter deliver or cause to be
delivered, from time to time, to Parent the portion of the Repurchase Price that
it is no longer prohibited from delivering, within five business days after the
date on which Company is no longer so prohibited; provided that, if Company at
any time after delivery of a notice of repurchase pursuant to Section 7(a) is
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from delivering to Parent the Repurchase Price in full
(and Company hereby undertakes to use its reasonable best efforts to obtain all
required regulatory and legal approvals and to file any required notices as
promptly as practicable in order to accomplish such repurchase), Parent may
revoke its notice of the Put whether in whole or to the extent of the
prohibition, whereupon, in the latter case, Company shall promptly (1)
deliver to Parent that portion of the Repurchase Price that Company is not
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prohibited from delivering and (2) deliver to Parent as appropriate, (A) a new
Agreement evidencing the right of Parent to purchase that number of shares of
Common Stock obtained by multiplying the number of shares of Common Stock for
which the surrendered Agreement was exercisable at the time of delivery of the
notice of repurchase by a fraction, the numerator of which is the Repurchase
Price less the portion thereof theretofore delivered to Parent and the
denominator of which is the Repurchase Price, and/or (B) to Parent, a
certificate for the Company Shares it is then so prohibited from repurchasing.
8. REGISTRATION RIGHTS.
(a) Following any exercise of the Company Option, Parent may by written
notice (the "Registration Notice") to Company request Company to register under
the Securities Act all or any part of the shares of Company Common Stock
acquired pursuant to this Agreement, including any voting securities issued by
way of dividend, distribution or otherwise in respect thereof (the "Restricted
Shares"), beneficially owned by Parent (the "Registrable Securities") in order
to permit the sale or other distribution of such Registrable Securities,
including pursuant to a firm commitment underwritten public offering; provided,
however, that any such Registration Notice must relate to a number of shares
equal to at least 4% of the outstanding shares of Company Common Stock and that
any rights to require registration hereunder shall terminate with respect to any
Shares that may be sold in any 90-day period pursuant to Rule 144 under the
Securities Act. The Registration Notice shall include a certificate executed by
Parent and its proposed managing underwriter, which underwriter shall be an
investment banking firm of nationally recognized standing and reasonably
acceptable to Company (the "Manager"), stating that Manager in good faith
believes that, based on the then prevailing market conditions, it will be able
to sell the Registrable Securities at a per share price equal to at least 70% of
the Fair Market Value of such shares. For purposes of this Section 8, the term
"Fair Market Value" shall mean the per share average of the closing sale prices
of Company's Common Stock on the Nasdaq National Market for the twenty (20)
trading days immediately preceding the date of the Registration Notice.
(b) Company shall use commercially reasonable efforts to effect, as
promptly as practicable, the registration under the Securities Act of the
unpurchased Registrable Securities; provided, however, that (i) Parent shall not
be entitled to more than two effective registration statements hereunder and
(ii) Company will not be required to file any such registration statement during
any period of time (not to exceed 40 days after such request in the case of
clause (A) below or 90 days in the case of clauses (B) and (C) below) when (A)
Company is in possession of material non-public information which it reasonably
believes would be detrimental to be disclosed at such time and, based on
consultation with counsel to Company, such information would have to be
disclosed if a registration statement were filed at that time; (B) Company is
required under the Securities Act to include audited financial statements for
any period in such registration statement and such financial statements are not
yet available for inclusion in such registration statement; or (C) Company
determines, in its reasonable good faith
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judgment, that such registration would interfere with any financing, acquisition
or other material transaction involving Company or any of its affiliates. If
consummation of the sale of any Registrable Securities pursuant to a
registration hereunder does not occur within 180 days after the filing with the
SEC of the initial registration statement, then such registration shall not be
taken into account as an effective registration for purposes of clause (i)
above. Company shall use commercially reasonable efforts to cause any
Registrable Securities registered pursuant to this Section 8 to be qualified for
sale under the securities or Blue Sky laws of such jurisdictions as Parent may
reasonably request and shall continue such registration or qualification in
effect in such jurisdiction; provided, however, that Company shall not be
required to qualify to do business in, or consent to general service of process
in, any jurisdiction by reason of this provision.
(c) The registration rights set forth in this Section 8 are subject to
the condition that Parent shall provide Company with such information with
respect to Parent's Registrable Securities, the plans for the distribution
thereof, and such other information with respect to Parent as, in the reasonable
judgment of counsel for Company, is necessary to enable Company to include in
such registration statement all material facts required to be disclosed with
respect to a registration thereunder.
(d) If Company securities of the same type as the Registrable
Securities are then authorized for quotation or trading or listing on the New
York Stock Exchange, the Nasdaq National Market, or any other securities
exchange or automated quotations system, Company, upon the request of Parent,
shall promptly file an application, if required, to authorize for quotation,
trading or listing the shares of Registrable Securities on such exchange or
system and will use its reasonable best efforts to obtain approval, if required,
of such quotation, trading or listing as soon as practicable.
(e) A registration effected under this Section 8 shall be effected at
Company's expense, except for underwriting discounts and commissions and fees
and expenses of counsel to Parent, and Company shall provide to the underwriters
such documentation (including certificates, opinions of counsel and "comfort"
letters from auditors) as are customary in connection with underwritten public
offerings as such underwriters may reasonably require. In connection with any
such registration, the parties agree (i) to indemnify each other and the
underwriters in the customary manner and (ii) to enter into an underwriting
agreement in form and substance customary for transactions of the type
contemplated hereby with the Manager and the other underwriters participating in
such offering.
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9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) In the event of any change in Company Common Stock by reason of
stock dividends, splits, mergers (other than the Merger), recapitalizations,
combinations, exchange of shares or the like, the type and number of shares or
securities subject to the Company Option, and the Exercise Price per share,
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction so that Parent shall receive, upon
exercise of the Company Option, the number and class of shares or other
securities or property that Parent would have received in respect of the Company
Common Stock if the Company Option had been exercised immediately prior to such
event or the record date therefor, as applicable. If additional shares of
Company Common Stock are issued after the date of this Agreement (other than
pursuant to an event described in the first sentence of this Section 9(a)), the
number of shares of Company Common Stock subject to the Company Option will be
adjusted so that it equals 19.99% of the number of shares of Company Common
Stock then issued and outstanding, without giving effect to any shares subject
to or issued pursuant to the Company Option.
(b) In the event that Company shall enter in an agreement: (i) to
consolidate with or merge into any person, other than Parent or any of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Parent or one of
its subsidiaries, to merge into Company and Company shall be the continuing or
surviving corporation, but, in connection with such merger, the then-outstanding
shares of Company Common Stock shall be changed into or exchanged for stock or
other securities of Company or any other person or cash or any other property or
the outstanding shares of Company Common Stock immediately prior to such merger
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the merged company; or (iii) to sell or otherwise transfer
all or substantially all of its assets to any person, other than Parent or any
of its Subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provision so that upon the consummation of any
such transaction and upon the terms and conditions set forth herein, Parent
shall receive for each Company Share with respect to which the Company Option
has not been exercised an amount of consideration in the form of and equal to
the per share amount of consideration that would be received by the holder of
one share of Company Common Stock less the Exercise Price (and, in the event of
an election or similar arrangement with respect to the type of consideration to
be received by the holders of Company Common Stock, subject to the foregoing,
proper provision shall be made so that the holder of the Company Option would
have the same election or similar rights as would the holder of the number of
shares of Company Common Stock for which the Company Option is then
exercisable).
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10. RESTRICTIVE LEGENDS. EACH CERTIFICATE REPRESENTING SHARES OF COMPANY COMMON
STOCK ISSUED TO PARENT HEREUNDER SHALL, TO THE EXTENT APPLICABLE, INCLUDE A
LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD ONLY
IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH
SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH
IN THE STOCK OPTION AGREEMENT, DATED AS OF JUNE 13, 1999, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER.
11. BINDING EFFECT; NO ASSIGNMENT. THIS AGREEMENT SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND
PERMITTED ASSIGNS. NEITHER THIS AGREEMENT NOR THE RIGHTS OR THE OBLIGATIONS OF
EITHER PARTY HERETO ARE ASSIGNABLE, EXCEPT BY OPERATION OF LAW, OR WITH THE
WRITTEN CONSENT OF THE OTHER PARTY. NOTHING CONTAINED IN THIS AGREEMENT,
EXPRESS OR IMPLIED, IS INTENDED TO CONFER UPON ANY PERSON OTHER THAN THE
PARTIES HERETO AND THEIR RESPECTIVE PERMITTED ASSIGNS ANY RIGHTS OR REMEDIES OF
ANY NATURE WHATSOEVER BY REASON OF THIS AGREEMENT. ANY RESTRICTED SHARES SOLD
BY PARENT IN COMPLIANCE WITH THE PROVISIONS OF SECTION 8 SHALL, UPON
CONSUMMATION OF SUCH SALE, BE FREE OF THE RESTRICTIONS IMPOSED WITH RESPECT TO
SUCH SHARES BY THIS AGREEMENT, AND ANY TRANSFEREE OF SUCH SHARES SHALL NOT BE
ENTITLED TO THE RIGHTS OF PARENT. CERTIFICATES REPRESENTING SHARES SOLD IN A
REGISTERED PUBLIC OFFERING PURSUANT TO SECTION 8 SHALL NOT BE REQUIRED TO BEAR
THE LEGEND SET FORTH IN SECTION 10.
12. SPECIFIC PERFORMANCE. THE PARTIES RECOGNIZE AND AGREE THAT IF FOR ANY
REASON ANY OF THE PROVISIONS OF THIS AGREEMENT ARE NOT PERFORMED IN ACCORDANCE
WITH THEIR SPECIFIC TERMS OR ARE OTHERWISE BREACHED, IMMEDIATE AND IRREPARABLE
HARM OR INJURY WOULD BE CAUSED FOR WHICH MONEY DAMAGES WOULD NOT BE AN ADEQUATE
REMEDY. ACCORDINGLY, EACH PARTY AGREES THAT, IN ADDITION TO OTHER REMEDIES, THE
OTHER PARTY SHALL BE ENTITLED TO AN INJUNCTION RESTRAINING ANY VIOLATION OR
THREATENED VIOLATION OF THE PROVISIONS OF THIS AGREEMENT. IN THE EVENT THAT ANY
ACTION SHOULD BE BROUGHT IN EQUITY TO ENFORCE THE PROVISIONS OF THIS AGREEMENT,
NEITHER PARTY WILL ALLEGE, AND EACH PARTY HEREBY WAIVES THE DEFENSE, THAT THERE
IS AN ADEQUATE REMEDY AT LAW.
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13. ENTIRE AGREEMENT. THIS AGREEMENT AND THE MERGER AGREEMENT (INCLUDING THE
COMPANY DISCLOSURE SCHEDULE AND THE PARENT DISCLOSURE SCHEDULE RELATING
THERETO) CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ALL OTHER PRIOR AGREEMENTS AND
UNDERSTANDINGS, BOTH WRITTEN AND ORAL, AMONG THE PARTIES OR ANY OF THEM WITH
RESPECT TO THE SUBJECT MATTER HEREOF.
14. FURTHER ASSURANCE. EACH PARTY WILL EXECUTE AND DELIVER ALL SUCH FURTHER
DOCUMENTS AND INSTRUMENTS AND TAKE ALL SUCH FURTHER ACTION AS MAY BE NECESSARY
IN ORDER TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.
15. VALIDITY. THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OF THIS
AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF THE OTHER
PROVISIONS OF THIS AGREEMENT, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT. IN
THE EVENT ANY COURT OR OTHER COMPETENT AUTHORITY HOLDS ANY PROVISION OF THIS
AGREEMENT TO BE NULL, VOID OR UNENFORCEABLE, THE PARTIES HERETO SHALL NEGOTIATE
IN GOOD FAITH THE EXECUTION AND DELIVERY OF AN AMENDMENT TO THIS AGREEMENT IN
ORDER, AS NEARLY AS POSSIBLE, TO EFFECTUATE, TO THE EXTENT PERMITTED BY LAW,
THE INTENT OF THE PARTIES HERETO WITH RESPECT TO SUCH PROVISION. EACH PARTY
AGREES THAT, SHOULD ANY COURT OR OTHER COMPETENT AUTHORITY HOLD ANY PROVISION
OF THIS AGREEMENT OR PART HEREOF TO BE NULL, VOID OR UNENFORCEABLE, OR ORDER
ANY PARTY TO TAKE ANY ACTION INCONSISTENT HEREWITH, OR NOT TAKE ANY ACTION
REQUIRED HEREIN, THE OTHER PARTY SHALL NOT BE ENTITLED TO SPECIFIC PERFORMANCE
OF SUCH PROVISION OR PART HEREOF OR TO ANY OTHER REMEDY, INCLUDING BUT NOT
LIMITED TO MONEY DAMAGES, FOR BREACH HEREOF OR OF ANY OTHER PROVISION OF THIS
AGREEMENT OR PART HEREOF AS THE RESULT OF SUCH HOLDING OR ORDER.
16. NOTICES. ANY NOTICE OR COMMUNICATION REQUIRED OR PERMITTED HEREUNDER SHALL
BE IN WRITING AND EITHER DELIVERED PERSONALLY, TELEGRAPHED OR TELECOPIED OR
SENT BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID, AND SHALL BE DEEMED TO
BE GIVEN, DATED AND RECEIVED WHEN SO DELIVERED PERSONALLY, TELEGRAPHED OR
TELECOPIED OR, IF MAILED, FIVE BUSINESS DAYS AFTER THE DATE OF MAILING TO THE
FOLLOWING ADDRESS OR TELECOPY NUMBER, OR TO SUCH OTHER ADDRESS OR ADDRESSES AS
SUCH PERSON MAY SUBSEQUENTLY DESIGNATE BY NOTICE GIVEN HEREUNDER.
B. if to Parent or Merger Sub, to:
DoubleClick Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
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with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
C. if to Company, to:
Abacus Direct Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: W. Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State without regard to any applicable
conflicts of law rules.
18. Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
19. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same instrument.
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20. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
21. Amendments; Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
DOUBLECLICK INC.
By: /s/ Xxxxx X. X'Xxxxxx
-------------------------------------
Name: Xxxxx X. X'Xxxxxx
Title: Chief Executive Officer
ABACUS DIRECT CORPORATION
By: /s/ M. Xxxxxxx Xxxxx
-------------------------------------
Name: M. Xxxxxxx Xxxxx
Title: Chief Executive Officer
SIGNATURE PAGE TO OPTION AGREEMENT
