EXHIBIT 10.11
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of April 1, 1998,
between ZD Inc., a Delaware corporation (the "Company"), and SOFTBANK Holdings
Inc., a Delaware corporation ( "Softbank").
WHEREAS, in connection with the reorganization of the Company,
Softbank has agreed to contribute to the Company all of the stock of Xxxx-Xxxxx
Inc. and ZD COMDEX and Forums Inc. in exchange for shares of common stock, par
value $.01 per share, of the Company (the "Common Stock").
WHEREAS, the parties hereto desire to provide for certain
rights to register such shares of Common Stock under the Securities Act of 1933,
as amended, in the manner and upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
terms and conditions herein contained, the parties hereto mutually agree as
follows:
1. Definitions
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1.1 Defined Terms. In addition to the capitalized terms defined
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elsewhere in this Agreement as used in this Agreement the following terms shall
have the following meanings (with the singular to include the plural, except
where the context otherwise requires):
(a) "Affiliate" of a Person shall mean any Person directly or
indirectly controlling, controlled by, or under common control with such Person.
(b) "Board of Directors" shall mean the Board of Directors of
the Company.
(c) "Commission" shall mean the Securities and Exchange
Commission.
(d) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(e) "Softbank Shares" shall mean the shares of Common Stock
issued to Softbank pursuant to the reorganization of the Company.
(f) "Softbank Securities" shall mean the Softbank Shares and
any and all issued shares of Registrable Securities (as defined in Section
2.1(a)).
(g) "Person" shall mean any individual, corporation,
partnership, association, trust or other entity or organization, including a
government or political subdivision or agency or instrumentality thereof.
(h) "Prospectus" shall mean the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
(i) "Registration" shall mean a Demand Registration or a
Piggyback Registration.
(j) "Registration Statement" shall mean any registration
statement of the Company which covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
(k) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(l) "Subsidiary" shall mean any corporation, partnership,
joint venture or other entity of which the Company owns, directly or indirectly,
a majority of the capital stock or a majority of the partnership or other equity
interests, or is a general partner.
(m) "underwritten registration" or "underwritten offering"
shall mean a sale of securities of the Company to an underwriter for reoffering
to the public.
2. Registration Rights
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2.1 Demand Registrations.
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(a) Softbank may make three written requests to the Company to
effect a registration under and in accordance with the provisions of the
Securities Act of all or part of the Registrable Securities.
"Registrable Securities" shall mean the Softbank Shares and
all shares of Common Stock issued or issuable upon conversion or exercise of any
securities of the Company, which may be issued or distributed with respect to,
or in exchange for, the Softbank Shares pursuant to a stock dividend, stock
split or other distribution, merger, consolidation, recapitalization or
reclassification or otherwise, and any securities of the Company which may be
issued or distributed with respect to, or in exchange for, any such Common Stock
or such other securities pursuant to a stock dividend, stock split or other
distribution, merger, consolidation, recapitalization or reclassification or
otherwise; provided, however, that any such Registrable Securities shall cease
to be Registrable Securities when (i) a Registration Statement with respect to
the sale of such Registrable Securities has been declared effective under the
Securities Act and such Registrable Securities have been disposed of in
accordance with the plan of distribution set forth in such Registration
Statement, (ii) such Registrable Securities are distributed pursuant to Rule 144
or Rule 144A (or any similar provision then in force) under the Securities Act
or (iii) such Registrable Securities shall have been otherwise transferred, new
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certificates for them not bearing a legend restricting further transfer under
the Securities Act shall have been delivered by the Company and they may be
resold without subsequent registration under the Securities Act; provided,
further, however, that any securities that have ceased to be Registrable
Securities cannot thereafter become Registrable Securities, and any security
that is issued or distributed in respect to securities that have ceased to be
Registrable Securities are not Registrable Securities.
Any registration requested pursuant to Section 2.1(a) shall
hereinafter be referred to as a "Demand Registration." Each request for a Demand
Registration shall specify the kind and aggregate amount of Registrable
Securities to be registered and the intended methods of disposition thereof,
which may be stated in the alternative if a shelf Registration Statement is
requested pursuant to Rule 415 under the Securities Act. The Company shall be
deemed to have effected a Demand Registration if (i) the Registration Statement
relating to such Demand Registration is declared effective by the Commission and
remains effective for at least 30 days; provided, however, that no Demand
Registration shall be deemed to have been effected if (x) such registration,
after it has become effective, is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental agency or
court or (y) the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration are not
satisfied or (ii) at any time after Softbank's request a Demand Registration and
prior to the effectiveness of the Registration Statement, the preparation of
such Registration Statement is discontinued or such Registration Statement is
withdrawn or abandoned at Softbank's request unless either (x) Softbank has
elected to pay and has paid to the Company in full the Registration Expenses (as
hereinafter defined) in connection with such Registration Statement or (y) such
discontinuation, withdrawal or abandonment is requested by Softbank because of
the occurrence of a significant negative change in market conditions or the
Company's business condition or prospects since the date of the initial request
for a Demand Registration.
(b) Priority of Demand Registrations. If the managing
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underwriter or agent of a Demand Registration (or, in the case of a Demand
Registration not being underwritten, Softbank), advises the Company in writing
that in its opinion the number of securities requested to be included in such
Demand Registration exceeds the number which can be sold in such offering
without a significant adverse effect on the price, timing or distribution of the
securities offered, the Company will include in such Registration only the
number of securities that, in the opinion of such underwriter or agent (or
Softbank, as the case may be), can be sold without a significant adverse affect
on the price, timing or distribution of the securities offered.
The Company and other holders of securities of the Company may
include other securities in such Registration if, but only if, such underwriter
or agent (or Softbank, as the case may be) concludes that such inclusion will
not have a significant adverse effect on the price, timing or distribution of
all the securities requested to be included in such Registration.
(c) The Company's Right to Defer Registration. If the Company
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is requested to effect a Demand Registration and the Company furnishes to
Softbank a copy of a resolution of the Board of Directors certified by the
Secretary of the Company stating that in the good faith judgment of the Board of
Directors it would be adverse to the Company and its
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securityholders for such Registration Statement to be filed on or before the
date such filing would otherwise be required hereunder because such registration
would interfere with any financing, acquisition, corporate reorganization or
other material transaction involving the Company or any of its Subsidiaries or
would require premature disclosure thereof, or would require disclosure of
material information which the Company would be justified in not disclosing in
the absence of such Registration, the Company shall have the right to defer such
filing for a reasonable period not to exceed 90 days after receipt of the
request for such Registration from Softbank. If the Company shall so postpone
the filing of a Registration Statement and if Softbank within 30 days after
receipt of the notice of postponement advises the Company in writing that it has
determined to withdraw its request for Registration, then such Demand
Registration shall be deemed to be withdrawn by it and such request shall be
deemed not to have been exercised for purposes of determining whether Softbank
retains the right to Demand Registrations pursuant to this Section 2.1. In
addition, if Softbank so notifies the Company of its determination to withdraw
its request for Registration and, within the 60 days immediately following the
deferral period, Softbank makes a written request to the Company for
Registration of the same class of Registrable Securities that were subject to
the Registration withdrawn pursuant to the preceding sentence, the Company shall
have no right to defer such Registration pursuant to this paragraph (c).
(d) Registration Statement Form. Registrations under this
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Section 2.1 shall be on such appropriate registration form of the Commission (i)
as shall be selected by the Company and as shall be reasonably acceptable to
Softbank and (ii) as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
Softbank's request for such Registration. If, in connection with any
Registration under this Section 2.1 which is proposed by the Company to be on
Form S-3 or any successor form to such Form, the managing underwriter, if any,
shall advise the Company in writing that in its opinion the use of another
permitted form is of material importance to the success of the offering, then
such Registration shall be on such other permitted form.
(e) Selection of Underwriters. If any offering pursuant to a
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Demand Registration involves an underwritten offering, Softbank shall have the
right to select the managing underwriter or underwriters to administer the
offering, subject to the consent of the Company, which consent shall not be
unreasonably withheld.
2.2 Piggyback Registrations.
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(a) Participation. Subject to Section 2.2(b) hereof, if at any
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time and from time to time after the date hereof, the Company files a
Registration Statement under the Securities Act with respect to any offering of
any equity securities by the Company for its own account or for the account of
any of its equity holders (other than (i) a registration on Form S-4 or S-8 or
any successor form to such Forms or (ii) any registration of securities as it
relates to an offering and sale to management of the Company pursuant to any
employee stock plan or other employee benefit plan arrangement) then, as soon as
practicable (but in no event less than ten days prior to the proposed date of
filing such Registration Statement), the Company shall give written notice of
such proposed filing to Softbank, and such notice shall offer Softbank the
opportunity to register such number of Registrable Securities as Softbank may
request (a
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"Piggyback Registration") and shall specify whether the offering is to be
underwritten or is to on another basis. Subject to Section 2.2(b), the Company
shall include in such Registration Statement all Registrable Securities
requested within 30 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by Softbank)
to be included in the Registration for such offering pursuant to a Piggyback
Registration; provided, however, that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the Registration Statement filed in connection with such Registration,
the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to Softbank and, thereupon, (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such Registration (but not from
its obligation to pay the Registration Expenses in connection therewith),
without prejudice, however, to the rights of Softbank to request that such
Registration be effected as a Registration under Section 2.1, and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. If the offering pursuant to such Registration
Statement is to be underwritten, then Softbank must participate in such
underwritten offering and shall not be permitted to make any other offering in
connection with such Registration. If the offering pursuant to such Registration
Statement is to be on any other basis, then, if Softbank makes a request for a
Piggyback Registration pursuant to this Section 2.2(a), it must participate in
such offering on such basis and it shall not be permitted to make an
underwritten offering in connection with such Registration. Softbank shall be
permitted to withdraw all or part of its Registrable Securities from a Piggyback
Registration at any time prior to the effective date thereof.
(b) Underwriter's Cutback. The Company shall use its best
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efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in the Registration for such offering under Section 2.2(a) or pursuant
to other piggyback registration rights granted by the Company, if any
("Piggyback Securities"), to be included on the same terms and conditions as any
similar securities included therein. Notwithstanding the foregoing, if the
managing underwriter or underwriters of any such proposed underwritten offerings
informs the Company and Softbank in writing that the total amount or kind of
securities, including Piggyback Securities, which Softbank and any other persons
or entities intend to include in such offering would be reasonably likely to
adversely affect the price or distribution of the securities offered in such
offering or the timing thereof, then the securities to be included in such
Registration shall be (i) first, 100% of the securities that the Company or
Softbank making a request for a Demand Registration pursuant to Section 2.1 or
pursuant to other demand registration rights, as the case may be, proposes to
sell, subject to the provisions of Section 2.1(b) and (ii) second, the number of
securities that, in the opinion of such underwriter or underwriters, can be sold
without an adverse effect on the price, timing or distribution of the securities
to be included.
(c) No Effect on Demand Registrations. No Registration of
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Registrable Securities effected pursuant to a request under this Section 2.2
shall be deemed to have been effected pursuant to Section 2.1 hereof or shall
relieve the Company of its obligation to effect any Registration upon request
under Section 2.1 hereof.
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2.3 Hold-Back Agreements.
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(a) Restrictions on Public Sale by Softbank. Softbank agrees,
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if requested by (i) the Company, or (ii) the managing underwriters in an
underwritten offering, not to effect any public sale or distribution of
securities of the Company the same as or similar to those being registered, or
any securities convertible into or exchangeable or exercisable for such
securities, in any Registration Statement, including a sale pursuant to Rule 144
under the Securities Act (except as part of such underwritten registration),
during the 14-day period prior to, and during the 90-day period (or, with
respect to a Piggyback Registration, such longer period of up to 180 days as may
be required by such underwriter) beginning on, the effective date of any
Registration Statement (except as part of such registration) or the commencement
of the public distribution of securities, to the extent timely notified in
writing by the Company or the managing underwriters (or the holders, as the case
may be).
(b) Restrictions on Public Sale by the Company and Others. The
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Company agrees, if requested by the managing underwriter in an underwritten
offering, not to effect any public sale or distribution of any securities the
same as or similar to those being registered by the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
14-day period prior to, and during the 90-day period (or, with respect to a
Piggyback Registration, such longer period of up to 180 days as may be required
by the underwriter) beginning on, the effective date of a Registration Statement
filed under Section 2.1 or Section 2.2 hereof or the commencement of the public
distribution of securities to the extent timely notified in writing by Softbank
or the managing underwriters (except as part of such registration, if permitted,
or pursuant to registrations on Forms S-4 or S-8 or any successor form to such
Forms or any registration of securities for offering and sale to management of
the Company pursuant to any employee stock plan or other employee benefit plan
arrangement). The Company agrees to use reasonable efforts to obtain from each
holder of restricted securities of the Company the same as or similar to those
being registered by the Company, or any restricted securities convertible into
or exchangeable or exercisable for any of its securities, an agreement not to
affect any public sale or distribution of such securities (other than securities
purchased in a public offering) during such period, except as part of any such
registration if permitted.
(c) Other Registration Rights Agreements. The Company may
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enter into any other registration rights agreement; provided, however, that the
rights and benefits of a securityholder with respect to registration of the
Company's securities as contained in any such other agreement shall be no more
favorable than the rights and benefits of holders of Registrable Securities as
contained in this Agreement.
2.4 Registration Procedures. In connection with the Company's
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Registration obligations pursuant to Sections 2.1 and 2.2 hereof, the Company
will use its best efforts to effect such registration to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and, not later than 45 days after receipt of any
request for a Demand Registration, file with the Commission a Registration
Statement or Registration
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Statements relating to the applicable Demand Registration or Piggyback
Registration including all exhibits and financial statements required by the
Commission to be filed therewith, and use its best efforts to cause such
Registration Statement to become effective under the Securities Act; provided,
however, that the Company may discontinue any Registration of its securities
which are not Registrable Securities (and, under the circumstances specified in
Section 2.1(d), may delay and, under the circumstances specified in Section
2.2(a), may delay or discontinue Registration of its securities which are
Registrable Securities) at any time prior to the effective date of the
Registration Statement relating thereto;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be requested by
Softbank or as may be necessary to keep the Registration Statement effective for
a period of not less than 270 days (or such shorter period which shall terminate
when all Registrable Securities covered by such Registration Statement have been
sold or withdrawn), or, if such Registration Statement relates to an
underwritten offering, such longer period as in the opinion of counsel for the
underwriters a Prospectus is required by law to be delivered in connection with
sales of Registrable Securities by an underwriter or dealer; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act, the Exchange Act, and the
rules and regulations promulgated thereunder with respect to the disposition of
all securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by
Softbank set forth in such Registration Statement or supplement to the
Prospectus;
(c) notify Softbank and the managing underwriters, if any, and
(if requested) confirm such advice in writing, as soon as practicable after
notice thereof is received by the Company (i) when the Registration Statement or
any amendment thereto has been filed or becomes effective, the Prospectus or any
amendment or supplement to the Prospectus has been filed, and, to furnish
Softbank and managing underwriters, if any, with copies thereof, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any preliminary Prospectus or Prospectus or
the initiation or threatening of any proceedings for such purposes, (iv) if at
any time the representations and warranties of the Company contemplated by
paragraph (m) below cease to be true and correct and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(d) promptly notify Softbank and the managing underwriters, if
any, when the Company becomes aware of the happening of any event as a result of
which the Registration Statement or the Prospectus included in such Registration
Statement (as then in effect) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein (in
the case of the Prospectus and any preliminary prospectus, in the light of the
circumstances under which they were made) not misleading or, if for any other
reason it shall be necessary during such time period to amend or supplement the
Registration Statement or the
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Prospectus in order to comply with the Securities Act and, in either case as
promptly as practicable thereafter, prepare and file with the Commission, and
furnish without charge to the selling holders and the managing underwriters, if
any, a supplement or amendment to such Registration Statement or Prospectus
which will correct such statement or omission or effect such compliance;
(e) make every reasonable effort to prevent the issuance of or
to obtain the withdrawal of any stop order or other order suspending the use of
any preliminary Prospectus or Prospectus or suspending any qualification of the
Registrable Securities;
(f) if requested by the managing underwriter or underwriters
or Softbank, promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters and Softbank agree
should be included therein relating to the plan of distribution with respect to
such Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being sold to such underwriters,
the purchase price being paid therefor by such underwriters and with respect to
any other terms of the underwritten (or best efforts underwritten) offering of
the Registrable Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after being notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(g) furnish to Softbank and each managing underwriter, without
charge, one executed copy and as many conformed copies as they may reasonably
request, of the Registration Statement and any amendment or post-effective
amendment thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference);
(h) deliver to Softbank and the underwriters, if any, without
charge, as many copies of the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such Persons may reasonably request
(it being understood that the Company consents to the use of the Prospectus or
any amendment or supplement thereto by Softbank and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto) and such other documents
as Softbank may reasonably request in order to facilitate the disposition of the
Registrable Securities by Softbank;
(i) on or prior to the date on which the Registration
Statement is declared effective, use its best efforts to register or qualify,
and cooperate with Softbank, the managing underwriter or agent, if any, and
their respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or blue sky
laws of each state and other jurisdiction of the United States as Softbank, any
such underwriter or agent reasonably requests in writing and do any and all
other acts or things reasonably necessary or advisable to keep such registration
or qualification in effect for so long as such Registration Statement remains in
effect and so as to permit the continuance of sales and dealings therein for as
long as may be necessary to complete the distribution of the Registrable
Securities covered by the Registration Statement; provided that the Company will
not be
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required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to taxation or
general service of process in any such jurisdiction where it is not then so
subject;
(j) cooperate with Softbank and the managing underwriter or
agent, if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may request at least two
business days prior to any sale of Registrable Securities to the underwriters;
(k) use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriters, if any, to
consummate the disposition of such Registrable Securities;
(l) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable Securities
and provide the applicable transfer agent with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company;
(m) make such representations and warranties to Softbank, and
the underwriters or agents, if any, in form, substance and scope as are
customarily made by issuers in primary underwritten public offerings;
(n) enter into such customary agreements (including a purchase
agreement or underwriting agreement) and take all such other actions as Softbank
or the managing underwriter or agent, if any, reasonably request in order to
expedite or facilitate the registration and disposition of such Registrable
Securities;
(o) obtain for delivery to Softbank and to the underwriter or
agent an opinion or opinions from counsel for the Company, upon consummation of
the sale of such Registrable Securities to the underwriters (the "Closing Date")
in customary form and in form, substance and scope reasonably satisfactory to
Softbank, such underwriters or agents and their counsel;
(p) obtain for delivery to the Company and the underwriter or
agent, with copies to Softbank, 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 the managing underwriter
or Softbank reasonably requests, dated the effective date of the Registration
Statement and brought down to the Closing Date;
(q) cooperate with Softbank and each underwriter or agent
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");
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(r) use its best efforts to comply with all applicable rules
and regulations of the Commission and make generally available to its security
holders, as soon as reasonably practicable (but not more than fifteen months)
after the effective date of the Registration Statement, an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and the rules
and regulations promulgated thereunder;
(s) as promptly as practicable after filing with the
Commission of any
document which is incorporated by reference into the Registration Statement or
the Prospectus, provide copies of such document to counsel for Softbank and to
the managing underwriters, if any;
(t) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration Statement
from and after a date not later than the effective date of such Registration
Statement; and
(u) use its best efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each securities exchange
on which any of the Company's securities are then listed or quoted on each
inter-dealer quotation system on which any of the Company's securities are then
quoted.
The Company may require Softbank to furnish to the Company
such information regarding distribution of such securities and such other
information relating to Softbank and its ownership of Registrable Securities as
the Company may from time to time reasonably request in writing. Softbank agrees
to furnish such information to the Company and to cooperate with the Company as
necessary to enable the Company to comply with the provisions of this Agreement.
Softbank agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 2.4(d) hereof, Softbank will forthwith
discontinue disposition of Registrable Securities pursuant to such Registration
Statement until Softbank's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 2.4(d) hereof, or until it is advised in
writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus, and, if so directed by the Company, such holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the time periods
during which such Registration Statement shall be maintained effective
(including the period referred to in Section 2.4(b) hereof) shall be extended by
the number of days during the period from and including the date of the giving
of such notice to and including the date when Softbank either receives the
copies of the supplemented or amended Prospectus contemplated by Section 2.4(d)
hereof or is advised in writing by the Company that the use of the Prospectus
may be resumed.
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2.5 Underwritten Offerings.
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(a) Requested Underwritten Offerings. If requested by the
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underwriters for any underwritten offering by Softbank pursuant to a
Registration requested under Section 2.1, the Company will use reasonable
efforts to enter into an underwriting agreement with such underwriters for such
offering, such agreement to be reasonably satisfactory in substance and form to
the Company, Softbank and the underwriters and to contain such representations
and warranties by the Company and such other terms as are generally prevailing
in agreements of that type, including, without limitation, indemnities to the
effect and to the extent provided in Section 2.8. Softbank will cooperate with
the Company in the negotiation of the underwriting agreement and will give
consideration to the reasonable suggestion of the Company regarding the form
thereof. Softbank shall be a party to such underwriting agreement and may, at
its option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of Softbank and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
Softbank. Softbank shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holder, such holder's
Registrable Securities, such holder's intended method of distribution and any
other representations required by law.
(b) Incidental Underwritten Offerings. If the Company proposes
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to register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by Softbank pursuant to Section 2.2
and subject to the provisions of Section 2.2(b), use its best efforts to arrange
for such underwriters to include all the Registrable Securities to be offered
and sold by Softbank among the securities of the Company to be distributed by
such underwriters. Softbank shall be a party to the underwriting agreement
between the Company and such underwriters and may, at its option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of Softbank and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of Softbank. Softbank shall
not be required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements regarding Softbank, Softbank's Registrable Securities and Softbank's
intended method of distribution or any other representations required by law.
(c) Participation in Underwritten Registration. No person may
------------------------------------------
participate in any underwritten registration hereunder unless such Person (i)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
-11-
2.6 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each Registration Statement, the Company will give
Softbank, its underwriters, if any, and its respective counsel and accountants
the opportunity to participate in the preparation of such Registration
Statement, each Prospectus included therein or filed with Commission, and, to
the extent practicable, each amendment thereof or supplement thereto, and give
each of them such access to its books and records (to the extent customarily
given to underwriters of the Company's securities) and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of Softbank's and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act;
provided, however, that any books, records, information or documents that are
designated by the Company in writing as confidential shall be kept confidential
by such Persons unless disclosure thereof is required by law.
2.7 Registration Expenses. All expenses incident to the Company's
---------------------
performance of or compliance with this Agreement, including without limitation
(i) all registration and filing fees, any other fees and expenses associated
with filings required to be made with the Commission or the NASD (including, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel as may be required by the rules and regulations of the NASD), (ii)
all fees and expenses of compliance with state securities or blue sky laws
(including fees and disbursements of counsel for the underwriters or selling
holders in connection with blue sky qualifications of the Registrable Securities
and determination of their eligibility for investment under the laws of such
jurisdictions as the managing underwriters or holders of a majority of the
Registrable Securities being sold may designate), (iii) all printing and related
messenger and delivery expenses (including expenses of printing certificates for
the Registrable Securities in a form eligible for deposit with The Depository
Trust Company and of printing prospectuses), (iv) all fees and disbursements of
counsel for the Company and of all independent certified public accountants of
the Company (including the expenses of any special audit and cold comfort
letters required by or incident to such performance), (v) reasonable premiums
for Securities Act liability insurance if the Company so desires or the
underwriters to reasonably require in accordance with then customary
underwriting practice, (vi) all fees and expenses incurred in connection with
the listing of the Registrable Securities on any securities exchange or
quotation of the Registrable Securities on any inter-dealer quotation system,
(vii) all reasonable fees and disbursements of one counsel selected by Softbank
to represent Softbank in connection with such registration, (viii) all fees and
disbursements of underwriters customarily paid by the issuers or sellers of
securities, excluding underwriting discounts and commissions and transfer taxes,
if any, and excluding fees and disbursements of counsel to such underwriters
(other than such fees and disbursements incurred in connection with any
registration or qualification of Registrable Securities under the securities or
blue sky laws of any state), (ix) all fees and expenses of accountants to
Softbank and (x) fees and expenses of other Persons retained by the Company (all
such expenses being herein called "Registration Expenses"), will be borne by the
Company, regardless of whether the Registration Statement becomes effective
(except as provided in Section 2.1 hereof). The Company will, in any event, pay
its internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any audit and the fees and expenses of any Person, including special
experts, retained by the Company.
-12-
2.8 Indemnification.
---------------
(a) Indemnification by the Company. The Company agrees to
------------------------------
indemnify and hold harmless, to the full extent permitted by law, Softbank, its
officers, directors, employees, partners, shareholders and agents and each
Person who controls Softbank (within the meaning of the Securities Act or the
Exchange Act) from and against all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and legal expenses)
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or preliminary
Prospectus or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company, by Softbank expressly for use
therein; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any such preliminary Prospectus if (i)
it is determined that it was the responsibility of Softbank to provide the
Person asserting such loss, claim, damage, liability or expense with a current
copy of the Prospectus and Softbank failed to deliver or cause to be delivered a
copy of the Prospectus to such Person after the Company had furnished such
holder with a sufficient number of copies of the same and (ii) the Prospectus
completely corrected in a timely manner such untrue statement or omission. This
indemnity shall be in addition to any liability the Company may otherwise have,
shall remain in full force and effect regardless of any investigation made by or
on behalf of such holder or any such officer, director, employee, agent,
partner, shareholder or controlling Person and shall survive termination of this
Agreement and the transfer of Registrable Securities by Softbank. The Company
will also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers, directors, partners, shareholders and each Person who controls such
Persons (within the meaning of the Securities Act and the Exchange Act) to the
same extent as provided above (with appropriate modification) with respect to
the indemnification of the holders of Registrable Securities, if requested.
(b) Indemnification by Softbank. Softbank agrees to indemnify
---------------------------
and hold harmless, to the full extent permitted by law, the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act or the Exchange Act) from and against any losses,
claims, damages, liabilities and expenses resulting from any untrue statement of
a material fact or any omission of a material fact required to be stated in the
Registration Statement, Prospectus or preliminary Prospectus or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is caused by or contained in any
information furnished in writing by Softbank to the Company specifically for
inclusion in such Registration Statement or Prospectus and has not been
corrected in a subsequent writing prior to or concurrently with the sale of the
Registrable Securities to the Person asserting such loss, claim, damage,
liability or expense. This indemnity shall be in addition to any liability such
selling holder may otherwise have, shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
officer, director or controlling Person and shall survive termination of this
Agreement and the transfer of Registrable Securities by Softbank. The Company
shall be entitled to receive
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indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the same
extent as provided above (with appropriate modification) with respect to
information so furnished in writing by such Persons specifically for inclusion
in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person
--------------------------------------
entitled to indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided, however,
that any delay or failure to so notify the indemnifying party shall relieve the
indemnifying party of its obligations hereunder only to the extent, if at all,
that it is prejudiced by reason of such delay or failure; provided further,
however, that any Person entitled to indemnification hereunder shall have the
right to select and employ separate counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at the expense of
such Person unless (i) the indemnifying party has agreed in writing to pay such
fees or expenses, or (ii) the indemnifying party shall have failed to assume the
defense of such claim within a reasonable time after receipt of notice of such
claim from the Person entitled to indemnification hereunder and employ counsel
reasonably satisfactory to such Person, or (iii) in the reasonable judgment of
any such Person, based upon advice of its counsel, a conflict of interest may
exist between such Person and the indemnifying party with respect to such claims
(in which case, if the Person notifies the indemnifying party in writing that
such Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld), provided that an indemnifying party shall not be
required to consent to any settlement involving the imposition of equitable
remedies or involving the imposition of any material obligations on such
indemnifying party other than financial obligations for which such indemnified
party will be indemnified hereunder. No indemnifying party shall consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. Whenever the indemnified party or the indemnifying party receives a
firm offer to settle a claim for which indemnification is sought hereunder, it
shall promptly notify the other of such offer. If the indemnifying party refuses
to accept such offer within 20 business days after receipt of such offer (or of
notice thereof), such claim shall continue to be contested and, if such claim is
within the scope of the indemnifying party's indemnity contained herein, the
indemnified party shall be indemnified pursuant to the terms hereof. If the
indemnifying party notifies the indemnified party in writing that the
indemnifying party desires to accept such offer, but the indemnified party
refuses to accept such offer within 20 business days after receipt of such
notice, the indemnified party may continue to contest such claim and, in such
event, the total maximum liability of the indemnifying party to indemnify or
otherwise reimburse the indemnified party hereunder with respect to such claim
shall be limited to and shall not exceed the amount of such offer, plus
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and disbursement) to the date of notice that the indemnifying party desires
to accept such offer, provided that this sentence shall not apply to any
settlement of any claim involving the imposition of equitable remedies or to any
-14-
settlement imposing any material obligations on such indemnified party other
than financial obligations for which such indemnified party will be indemnified
hereunder. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the written opinion of counsel to the indemnified party reasonably
satisfactory to the indemnifying party, use of one counsel by the underwriters
on the one hand, and by the securityholders on the other, would be expected to
give rise to a conflict of interest between such underwriters, on the one hand
and such securityholders on the other with respect to such claim, in which event
the indemnifying party shall be obligated to pay the fees and expenses of one
such additional counsel.
(d) Contribution. If for any reason the indemnification
------------
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated by the
preceding paragraphs (a) and (b), then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations,
provided that Softbank shall not be required to contribute in an amount greater
than the dollar amount of the proceeds received by Softbank with respect to the
sale of any such Registrable Securities. 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.
2.9 Rules 144 and 144A. The Company covenants that it will file the
------------------
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of
Softbank after the date that is the second anniversary of the date thereof, make
publicly available other information so long as necessary to permit sales
pursuant to Rule 144 or 144A under the Securities Act), and it will take such
further action as Softbank may reasonably request, all to the extent required
from time to time to enable Softbank to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rules 144 or 144A under the Securities Act, as such Rules may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
3. Transfer of Securities.
----------------------
3.1 Notice of Proposed Transfer. At the time of any transfer or sale or
---------------------------
proposed transfer or sale of any Softbank Securities, the Company may require
written notice describing briefly the manner of such transfer or sale and a
written opinion of counsel for the holder thereof (who may be inside counsel) to
the effect that such transfer or sale may be effected without the registration
of Softbank Securities under the Securities Act and will be made in compliance
with
-15-
applicable state securities and blue sky laws. The Company shall thereupon
permit or cause its transfer agent (if any) to permit such transfer or sale to
be effected unless the Company, within five days after receipt of such notice
and opinion, shall furnish to such holder and such holder's counsel (if any) an
opinion of the Company's outside counsel which (i) states that such sale or
transfer may not be effected without the registration of such Softbank
Securities under the Securities Act (or will not be made in compliance with
applicable securities and blue sky laws) and (ii) specifies the reasons,
factual, legal or both, why such counsel's opinion differs from that of holder's
counsel. However, if in such written notice to the Company the transferring
holder informs the Company that the transfer or sale is to a purchaser or
transferee whom the transferring holder knows or reasonably believes to be a
"qualified institutional buyer," as that term is defined in Rule 144A
promulgated under the Securities Act, no opinion of counsel shall be required.
3.2 Termination of Restrictions. Notwithstanding the foregoing
provisions of this Section 3, the restrictions imposed by this Section 3 upon
the transferability of the Softbank Securities shall terminate as to any
particular Softbank Securities when (i) such Softbank Securities shall have been
effectively registered under the Securities Act and sold by the holder thereof
in accordance with such registration, (ii) such Softbank Securities have been
sold in accordance with Rule 144 or 144A promulgated under the Securities Act,
or (iii) written opinions to the effect that such restrictions are no longer
required or necessary under any federal or state law or regulation have been
received from counsel for the holder of thereof (who may be inside counsel) and,
if the Company shall so require, from counsel for the Company.
3.3 Exchange, Transfer and Replacement of Certificates. Subject to the
foregoing provisions of this Section 3, upon surrender of any certificate
representing Softbank Securities duly endorsed for exchange or transfer, the
Company will, at its expense, or will cause its transfer agent, at the Company's
expense, to issue in exchange therefor new certificates in such denominations as
may be requested by the certificate so surrendered and registered as such
stockholder may request. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any certificate
representing Softbank Securities and, in the case of any such loss, theft or
destruction, upon delivery of an agreement of indemnity satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such certificate, the Company will issue, at its expense, or will cause its
transfer agent, at the Company's expense, to issue a new certificate
representing the same aggregate number of Softbank Securities represented by
such lost, stolen, destroyed or mutilated certificate; provided, however, that
in the event of any loss, theft or destruction of any certificate representing
Softbank Securities registered in the name of Softbank or any of its Affiliates,
or in the name of any other holder which is an institutional investor or its
nominee, the Company shall not require such person or Affiliate or any other
holder which is an institutional investor or its nominee to furnish any
indemnity or surety bond in connection with the issuance of a new certificate
therefor if the Company is furnished with an affidavit of the holder (if the
holder is an individual) or, otherwise, the Chairman of the Board, President,
any Vice President, Treasurer or any Assistant Treasurer of the holder (or, in
the case of a nominee, the beneficial owner for which such holder is serving as
nominee) setting forth the fact of such loss, theft or destruction and, together
with such affidavit, such holder furnishes (or, in case of a nominee, the
beneficial owner for which such holder is serving as nominee furnishes) to the
Company its written
-16-
agreement to indemnify the Company with respect to such loss, theft or
destruction; the Company shall, however, have the right to require any holder of
Softbank Securities other than Softbank or any of its Affiliates or any other
holder which is an institutional investor or its nominee to furnish such an
indemnity or surety bond. The party delivering any certificate representing
Softbank Securities pursuant to this Section 3.3 will pay the cost of such
delivery (including the cost of insurance against loss or theft in an amount
satisfactory to the sender).
4. Miscellaneous.
-------------
4.1 Injunctive Relief. Remedies for breach by the Company of its
-----------------
obligations to register the Registrable Securities shall be as otherwise set
forth herein. It is hereby agreed and acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the event
of any such failure, an aggrieved Person will be irreparably damaged and will
not have an adequate remedy at law. Any such Person shall, therefore, be
entitled to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.
4.2 Notices. All notices, other communications or documents provided
-------
for or permitted to be given hereunder, shall be made in writing and shall be
given either personally by hand-delivery, by facsimile transmission, by mailing
the same in a sealed envelope, registered first-class mail, postage prepaid,
return receipt requested, or by air courier guaranteeing overnight delivery:
(a) If to the Company: Xxxx-Xxxxx Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy number:
(b) If to Softbank: SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Vice Chairman
Telecopy number: 000-000-0000
With copies to: Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy number: (000) 000-0000
Each party hereto, by written notice given to the other
parties hereto in accordance with this Section 4.2 may change the address to
which notices, other communications
-17-
or documents are to be sent to such party. All notices, other communications or
documents shall be deemed to have been duly given: (i) at the time delivered by
hand, if personally delivered; (ii) when receipt is acknowledged by electronic
confirmation, if by facsimile transmission; (iii) four business days after being
deposited in the mail, postage prepaid, if mailed; and (iv) on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery;
provided, however, that notices of a change of address shall be effective only
upon receipt.
4.3 Successors and Assigns.
----------------------
(a) This Agreement shall inure to the benefit of and be
binding upon the parties, and successors and assigns of each of the parties.
(b) All of the terms, covenants and agreements contained in
this Agreement are solely for the benefit of the parties hereto and their
respective successors and assigns as provided in Section 4.3(a), and no other
parties (including, without limitation, any other stockholder or creditor of the
Company, or any director, officer or employee of the Company) are intended to be
benefitted by, or entitled to enforce, this Agreement.
4.4 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
4.5 Headings. The headings in this Agreement are inserted herein for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
4.6 Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
4.7 Entire Agreement; Amendment. This Agreement contains the entire
---------------------------
agreement among the parties hereto with respect to the subject matter contained
herein, supersedes all prior agreements, negotiations and understandings,
whether written or oral, with respect to the subject matter hereof, and may not
be amended, modified or supplemented, and waivers and consents to departures
from the provisions hereof may not be given, except by an instrument in writing
signed by Softbank and by the Company. There are no restrictions, promises,
warranties or undertakings, other than those set forth in this Agreement.
4.8 Waiver. No action taken pursuant to this Agreement shall be deemed
------
to constitute a waiver by the party taking such action of compliance with any
covenants or agreements contained herein. No failure to exercise and no delay in
exercising any right, power or privilege of a party hereunder shall operate as a
waiver nor a consent to the modification of the terms hereof unless given by
that party in writing. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach.
-18-
4.9 Inspection. So long as this Agreement shall be in effect, this
----------
Agreement shall be made available for inspection by an stockholder of the
Company at the principal offices of the Company.
4.10 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 of all which together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first written above.
ZD INC.
By: __________________________________
Name: ________________________
Title: _______________________
SOFTBANK HOLDINGS INC.
By: __________________________________
Name: ________________________
Title: _______________________
