Exhibit 4.01
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Rights Agreement") is made and
entered into as of September __, 1999 (the "Effective Date"), by and between
▇▇▇▇▇▇▇.▇▇▇ Inc., Inc., a Delaware corporation ("Company"), and The ▇▇▇▇ Group,
Inc., a Delaware corporation ("Stockholder").
R E C I T A L S
- - - - - - - -
A. Stockholder and Company have entered into an Asset Purchase Agreement
(the "Acquisition Agreement") dated as of September __, 1999, pursuant to which
Company will acquire substantially all of the assets of the Automotive
Information Center division of Stockholder (the "Acquisition").
B. As a condition precedent to the consummation of the Acquisition,
Section 3.2 of the Acquisition Agreement provides that the Company shall grant
Stockholder certain registration rights with respect to the shares of Company's
Common Stock that are issued to the Stockholder in the Acquisition (the
"Acquisition Shares"), subject to the terms and conditions set forth in the
Acquisition Agreement and this Rights Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, and for other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. REGISTRATION RIGHTS.
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1.1 Definitions. For purposes of this Section 1:
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(a) Registration. The terms "register," "registered," and
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"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "1933 Act"), and any post-effective amendments filed or required to be
filed and the declaration or ordering of effectiveness of such registration
statement.
(b) Registrable Securities. The term "Registrable Securities"
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means: (1) all of the Acquisition Shares, and (2) any shares of Common Stock of
the Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Acquisition Shares; excluding in all
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cases, however, (i) any Registrable Securities sold by a person in a transaction
in which rights under this Section 1 are not assigned in accordance with Section
2 of this Rights Agreement, or (ii) any Registrable Securities sold in a public
offering pursuant to a registration statement filed with the SEC, sold to the
public pursuant to Rule 144 promulgated under the 1933 Act ("Rule 144") or sold
to the public in any other transaction exempt from the registration requirements
of the 1933 Act.
(c) Prospectus. The term "Prospectus" shall mean the prospectus
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included in any registration statement filed pursuant to the provisions hereof
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the 1933 Act), as amended
or supplemented by any prospectus supplement (including, without limitation, any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by such registration statement), and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
(d) Holder. For purposes of this Rights Agreement, the term
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"Holder" means any person owning of record Registrable Securities.
(e) SEC. The term "SEC" or "Commission" means the U.S.
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Securities and Exchange Commission.
1.2 Registration.
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(a) Form S-1 Shelf Registration. Company shall prepare and file
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with the SEC following the Closing (as defined in the Acquisition Agreement),
and use its commercially reasonable efforts (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the ▇▇▇▇ ▇▇▇) to
have declared effective no later than November 5, 1999, a "shelf" registration
statement pursuant to Rule 415 under the 1933 Act on Form S-1 (the "S-1 Shelf
Registration") providing for the resale by each Holder of all of the Registrable
Securities then owned by the Holders. Company shall keep the S-1 Shelf
Registration continuously effective, pursuant to the rules, regulations or
instructions under the 1933 Act applicable to the registration statement used by
Company for such S-1 Shelf Registration, for such period (the "S-1 Shelf
Effectiveness Period") ending on the earlier of (i) second anniversary of the
Closing Date (as defined in the Acquisition Agreement), (ii) the effective date
of the Company's registration statement on Form S-3 (the "S-3 Shelf
Registration") providing for the resale by the Holders of all of the Registrable
Securities then owned by the Holders or (iii) the date on which the Registrable
Securities cease to meet the definition of Registrable Securities pursuant to
Section 1.1(b) hereof. The S-1 Shelf Registration may not include other
securities of the Company which are held by other stockholders of the Company.
(b) Form S-3 Shelf Registration. As soon as practicable after it
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is eligible to use Form S-3 under the 1933 Act (or any successor form), the
Company shall use its commercially reasonable efforts to file with the SEC a
"shelf" registration statement on Form S-3 (the "S-3 Shelf Registration")
providing for the resale by each Holder of all of the Registrable Securities
then owned by the Holders. The Company shall (1) use its commercially reasonable
efforts to become eligible to use Form S-3 and provided it is Form S-3 eligible,
to have such S-3 Shelf Registration declared effective no later than two days
after the Company has issued its first quarter earnings release (which the
Company expects to be on or about April 17, 2000) or if it is not then Form S-3
eligible, to have such S-3 Shelf Registration declared effective two business
days after the Company is eligible under the 1933 Act to have declared effective
a S-3 Shelf
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Registration, and (ii) keep the S-3 Shelf Registration continuously effective,
pursuant to the rules, regulations or instructions under the 1933 Act applicable
to the registration statement used by Company for such S-3 Shelf Registration,
for such period (the "S-3 Shelf Effectiveness Period") ending on the earlier of
(i) the second anniversary of the Closing Date (as defined in the Acquisition
Agreement) or (ii) the date on which the Registrable Securities cease to meet
the definition of Registrable Securities pursuant to Section 1.1(b) hereof. The
S-3 Shelf Registration may not include other securities of the Company which are
held by other stockholders of the Company.
(c) Timing and Manner of Sales. Any sale of Registrable
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Securities, in whole or in part, pursuant to the S-1 Shelf Registration or the
S-3 Shelf Registration, as applicable, under this Section 1.2 may be made only
during a "Permitted Window" (as defined in Section 1.2(f) below). In addition,
any sale of Registrable Securities pursuant to a the S-1 Shelf Registration or
the S-3 Shelf Registration, as applicable, under this Section 1.2 may only be
made in accordance with the method or methods of distribution of such
Registrable Securities that are described in the registration statement for the
S-1 Shelf Registration or the S-3 Shelf Registration, as applicable, and
permitted by such form of registration statement, which methods of distribution
will be specified by the Holders in their Notice of Resale (as defined below).
(d) No Underwritings. No sale of Registrable Securities under
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either the S-1 Shelf Registration nor the S-3 Shelf Registration, as applicable,
effected pursuant to this Section 1.2 may be effected pursuant to any
underwritten offering without the Company's prior written consent, which may not
be unreasonably withheld.
(e) Notice of Resale. Before any Holder may make any sale,
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transfer or other disposition of any Registrable Securities under either the S-1
Shelf Registration or the S-3 Shelf Registration, as applicable, during the S-1
Shelf Effectiveness Period or the S-3 Shelf Effectiveness Period, respectively,
a Holder must first give written notice to the Company (a "Notice of Resale") of
such Holder's present bona fide intention to so sell, transfer or otherwise
dispose of some or all of such Holder's or Holders' Registrable Securities, and
the number of Registrable Securities such Holder proposes to so sell, transfer
or otherwise dispose of and such Holder's intended plan of distribution of such
Registrable Securities (which must conform to the plan of distribution contained
in the prospectus for the S-1 Shelf Registration or the S-3 Shelf Registration,
as applicable).
(f) Permitted Window; Sale Procedures.
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(i) During the S-1 Shelf Effectiveness Period, a "S-1 Shelf Permitted Window"
means a period commencing on the later of (A) the Company's written notification
to the Holders in response to a Notice of Resale in accordance with clause
(iii), or (B) the first day of the second month of each calendar quarter (i.e.,
November 1, 1999, February 1, 2000, etc.) and ending on the last day of the
second month of each calendar quarter (i.e., November 30, 1999, February 29,
2000, etc.) during the S-1 Shelf Effectiveness Period; provided, however, that
in the event the Company determines that an amendment to the registration
statement is necessary as provided in clause (iii), the S-1 Shelf Permitted
Window shall extend beyond the last day of the second month of each quarter so
as to permit the Holder to sell Registrable Securities for one day for each day
that the registration statement was not effective during the second month of the
calendar
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quarter up to a maximum of five (5) business days commencing upon effectiveness
of the amended registration statement; provided, further, that if the Company
shall determine to register any of its equity securities either for its own
account or any other stockholders of the Company, other than a registration
relating solely to employee benefits plans or a Rule 145 transaction (a "Company
Registration"), the S-1 Shelf Permitted Window shall mean any time during the S-
1 Shelf Effectiveness Period that the Company or other stockholders of the
Company are permitted to sell in the Company Registration.
(ii) During the S-3 Shelf Effectiveness Period, a "S-3
Shelf Permitted Window" means any time following the Company's written
notification to the Holders in response to a Notice of Resale in accordance with
clause (iii).
(iii) Upon receipt of a Notice of Resale (unless a
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certificate of the President or the Chief Financial Officer of the Company is
delivered as provided in Section 1.3(b) below), the Company shall give written
notice to all Holders as soon as practicable, but in no event more than two (2)
business days after the Company's receipt of such Notice of Resale that either:
(A) the prospectus contained in the registration statement for the S-1 Shelf
Registration or the S-3 Shelf Registration, as applicable, is current (it being
acknowledged that it may be necessary for the Company during this period to
supplement the prospectus or make an appropriate filing under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), so as to cause the prospectus
to become current) and that (as applicable) the Permitted Window will commence
on the date of such notice by the Company; or (B) the Company is required under
the 1933 Act and the regulations thereunder to amend the registration statement
for the S-1 Shelf Registration or the S-3 Shelf Registration, as applicable, in
order to cause the prospectus to be current. In the event that the Company
determines that an amendment to the registration statement is necessary as
provided above, it shall file and cause such amendment to become effective as
soon as practicable; whereupon it shall promptly notify the Holders that the
Permitted Window will then commence.
(g) Trading Window Compliance. Each Holder acknowledges that the
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Company maintains an ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Compliance Program and an ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Policy, as such may be amended (the "Company Trading Policy") and that the
Company Trading Policy requires that those directors, officers, and employees
whom the Company determines to be "Access Personnel" or otherwise subject to the
"trading window" and pre-clearance requirements of the Company Trading Policy
(and members of their immediate families and households) are permitted to effect
trades in Company securities: (i) only during those specified time periods
("trading windows") in which such persons are permitted to make sales, purchases
or other trades in the Company's securities under the "trading window"
provisions of the Company Trading Policy; and (ii) only after pre-clearance of
such sales, purchases or other trades with the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Compliance Officer. If a Holder is or becomes subject to the "trading window"
and/or "pre-clearance" provisions of the Company Trading Policy described above,
then, notwithstanding anything herein to the contrary, such Holder may sell,
transfer and dispose of Registrable Securities only during those trading windows
during which such Company Access Personnel are permitted to effect trades in the
Company stock under the Company Trading Policy and only after pre-clearing such
trades with the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Compliance Officer as provided in the
Company Trading Policy.
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(h) Expenses. All reasonable expenses, including, without
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limitation, all registration and filing fees, printing expenses, blue sky fees
and expenses, the expense of any special audits incident to or required by such
registration and all reasonable fees and disbursements of one counsel retained
by the Holders of a majority of Registrable Securities to be included in the
registration, other than underwriting discounts and brokers commissions,
incurred in connection with the S-1 Shelf Registration Statement and the S-3
Shelf Registration Statement shall be borne by Company.
1.3 Limitations. Notwithstanding the provisions of Section 1.2
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above, the Company shall not be obligated to effect any registration,
qualification or compliance of Registrable Securities pursuant to Section 1.2 of
this Agreement, and the Holders shall not be entitled to sell Registrable
Securities pursuant to any registration statement filed under Section 1.2 of
this Agreement:
(a) if the Company shall furnish to the Holders a certificate
signed by the President or Chief Financial Officer of the Company stating that,
in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Permitted
Window to be in effect at such time, due, for example, to the existence of a
material, non-public development or potential material, non-public development
involving the Company which the Company would be obligated to disclose in the
prospectus contained in the S-1 Shelf Registration or the S-3 Shelf
Registration, as applicable, which disclosure would, in the good faith judgment
of the Board of Directors of the Company, be premature or otherwise inadvisable
at such time or would have a material adverse affect upon the Company and its
stockholders, in which event the Company shall have the right to defer a
Permitted Window after receipt of a Notice of Resale from the Holders pursuant
to this Section 1.3(a) for (x) one period of not more than fifteen (15) days
during the S-1 Shelf Effectiveness Period and (y) two periods of not more than
forty-five (45) days during the S-3 Shelf Effectiveness Period provided that the
postponement periods shall not be consecutive;
(b) in any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service of process in such jurisdiction and except as may be required by the
1933 Act or applicable rules and regulations thereunder;
(c) if the SEC refuses to declare such registration effective
due to the participation of any particular Holder in such registration (unless
such Holder withdraws all such Holder's Registrable Securities from such
registration statement); or
(d) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any such registration,
or the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction.
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(e) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company and
counsel to the Holders to enable the Holders to consummate the disposition of
the Registrable Securities in accordance with the plan of distribution in the
registration statement.
(f) if requested by the Holders, promptly incorporate in such
registration statement or Prospectus, pursuant to a supplement or post-effective
amendment, if necessary, such information as the Holders may reasonably request
to have included therein, including, without limitation, information relating to
plan of distribution, number of shares of Registrable Securities being sold, the
purchase price being paid and any other terms of the offering and make all
required filings of any such prospectus supplement or post-effective amendment
as soon as possible after the Company is notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment.
(g) include in such registration statements any additional
securities that become Registrable Securities by operation of the definition
thereof.
(h) use its commercially reasonable efforts to cause all
Registrable Securities included in any registration pursuant hereto to be listed
on each securities exchange on which securities of the same class are then
listed or, if not then listed on any securities exchange, to be eligible for
trading in any over-the-counter market or trading system in which securities of
the same class are then traded.
1.4 Obligations of Company. Company shall, as expeditiously as reasonably
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possible:
(a) Prepare promptly and file with the SEC the S-1 Shelf
Registration and S-3 Shelf Registration as provided in Sections 1.2(a) and (b),
respectively, which registration statements (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading and cause such
registration statements to become effective as provided in Sections 1.2(a) and
(b).
(b) Prepare promptly and file with the SEC such amendments and
supplements to such registration statements and the Prospectus used in
connection with such registration statements as may be necessary to comply with
the provisions of the 1933 Act with respect to the disposition of all securities
covered by such registration statements.
(c) Furnish to Holders such number of copies of the applicable
registration statement and of each amendment and supplement thereto (in each
case including all exhibits) and the Prospectus, including each preliminary
Prospectus, any summary Prospectus or any term sheet (as such term is used in
Rule 434 under the ▇▇▇▇ ▇▇▇) and any other Prospectus
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filed under Rule 424 under the 1933 Act in conformity with the requirements of
the 1933 Act, and such other documents including, without limitation, documents
incorporated by reference, as reasonably requested in order to facilitate the
disposition of the Registrable Securities owned by it that are included in such
registration.
(d) Use its commercially reasonable efforts to register and
qualify the Registrable Securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by Holders, and keep such registration or qualification in
effect for so long as the applicable registration statement remains in effect
and take any other action which may be reasonably necessary or advisable to
enable the Holders to consummate the sale of such Registrable Securities,
provided that Company shall not be required in connection therewith or as a
condition thereto to file a general consent to service of process in any such
states or jurisdictions unless the Company is already subject to service of
process in such jurisdiction and except as may be required by the 1933 Act or
applicable rules and regulations thereunder.
(e) Notify each Holder promptly (i) of any request by the SEC
or any other federal or state governmental authority during the period of
effectiveness of the registration statement for amendments or supplements to
such registration statement or related prospectus or for additional information,
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose, (iii) of the
receipt by Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (iv) of the happening of any event which makes any
statement made in the registration statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the registration
statement or Prospectus so that it will not contain any untrue statement of a
material fact required to be stated therein or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (v) of Company's determination that a post-effective amendment
to the registration statement would be appropriate.
1.5 Furnish Information. It shall be a condition precedent to the
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obligations of Company to take any action pursuant to Section 1.2 that each
Holder shall furnish to Company such information regarding Holder, the
Registrable Securities held by Holder, and the intended method of disposition of
such securities as shall be required to timely effect the registration of
Holder's Registrable Securities. The Company shall furnish to the Holders
copies of any registration statement (including all exhibits) and any Prospectus
forming a part thereof and any amendments and supplements thereto (including all
documents incorporated by reference) sufficiently in advance of its use and/or
filing with the SEC (but in no event less than two business days in advance) to
allow Holders a meaningful opportunity to comment thereon, and the Company shall
not file or use any such registration statement to which the Holders shall
reasonably object.
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1.6 Delay of Registration. No Holder will have any right to obtain
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or seek an injunction restraining or otherwise delaying any registration that is
the subject of this Rights Agreement as a result of any controversy that might
arise with respect to the interpretation or implementation of this Rights
Agreement.
1.7 Indemnification
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(a) By Company. To the extent permitted by law, Company will
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indemnify and hold harmless each of the Holders, and each of the officers,
directors, employees and agents of a Holder or underwriter (as defined in the
▇▇▇▇ ▇▇▇) and each person, if any, who controls a Holder within the meaning of
the 1933 Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they or any of them may become subject
under the 1933 Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in the registration statement, including any
preliminary, final or summary Prospectus, offering circular or other document
contained therein or in any amendments or supplements thereto;
(ii) the omission or alleged omission to state in the
registration statement, including any preliminary, final or summary Prospectus,
offering circular or other document contained therein or in any amendments or
supplements thereto, a material fact required to be stated therein, or necessary
to make the statements therein not misleading; or
(iii) any violation or alleged violation by Company of the
1933 Act, the 1934 Act, any federal or state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 Act or any federal or state
securities law in connection with the offering covered by such registration
statement.
Company shall reimburse each Holder, such officer, director, employee or agent,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
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indemnity agreement contained in this subsection 1.7(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Company (which consent
shall not be unreasonably withheld), nor shall Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration statement by Holder, or by such, officer, director,
employee, agent, underwriter or controlling person of any Holder.
(b) By Holders. To the extent permitted by law, each Holder will,
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if Registrable Securities held by it are included in the securities covered by
such registration statement, indemnify and hold harmless on a several but not
joint basis, the Company, each of its directors and officers who have signed the
Registration Statement, each person, if any, who
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controls Company within the meaning of the 1933 Act, any other employee or agent
of Company, each other Holder, each person, if any, who controls such Holder
within the meaning of the 1933 Act, and any other employee or agent of such
Holder, against any losses, claims, damages or liabilities to which Company or
any such director, officer, or controlling person, employee or agent may become
subject under the 1933 Act, the 1934 Act or other federal or state law, insofar
as such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration statement; and such Holder shall reimburse
any legal or other expenses reasonably incurred by Company or any such director,
officer, or controlling person, employee or agent in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
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1.7(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder, which consent shall not be unreasonably withheld; and
provided further, that the total amounts payable in indemnity by Holder under
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this Section 1.7(b) in respect of any Violation shall not exceed the net
proceeds received by Holder in the registered offering out of which such
Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under
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this Section 1.7 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim for
indemnification in respect thereof is to be made against any indemnifying party
under this Section 1.7, deliver to the indemnifying party a written notice of
the commencement of such an action and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
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however, that an indemnified party shall have the right to retain its own
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counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall (to the
extent of such prejudice) relieve such indemnifying party of any liability to
the indemnified party under this Section 1.7, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 1.7.
No indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement. Each indemnified party shall promptly
furnish such information regarding itself or the claim in question as an
indemnifying party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
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(d) Defect Eliminated in Final Prospectus. The foregoing
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indemnity agreements of Company and such Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the Registration Statement becomes effective or in the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreements shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the 1933 Act.
(e) Contribution. In order to provide for just and equitable
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contribution to joint liability under the 1933 Act in any case in which either
(i) Holder (and/or any officer, director, employee, agent, underwriter or
controlling person who may be indemnified under Section 1.7(a)), makes a claim
for indemnification pursuant to this Section 1.7 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Section 1.7 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of such Holder
(and/or any officer, director, employee, agent, underwriter or controlling
person who may be indemnified under Section 1.7 (a)) in circumstances for which
indemnification is provided under this Section 1.7; then, and in each such case,
Company and such Holder (and/or such other person) will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in proportion to their relative fault as
determined by a court of competent jurisdiction; provided however, that in no
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event, except in instances of intentional fraud by the Holder in which case
there is no limitation (i) shall any Holder be responsible for more than the
portion represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the registration statement
bears to the public offering price of all securities offered by and sold under
such registration statement (less underwriting discounts and commissions) or
(ii) shall a Holder be required to contribute any amount in excess of the public
offering price of all such securities offered and sold by such Holder pursuant
to such registration statement (less underwriting discounts and commissions);
and in any event, no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
(f) Survival. The obligations of Company and such Holder under
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this Section 1.7 shall survive the completion of any offering of Registrable
Securities in a registration statement.
1.8 Duration and Termination of Company's Obligations. Company will
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have no obligations pursuant to Section 1.2 of this Rights Agreement with
respect to any Notice of Resale or other request or requests for registration
(or inclusion in a registration) made by any Holder or to maintain or continue
to keep effective any registration or registration statement pursuant hereto:
(a) after the expiration or termination of the S-1 Shelf Effectiveness Period
and the S-3 Shelf Effectiveness Period; or (b) if all Registrable Securities
have been registered and sold pursuant to a registration effected pursuant to
this Rights Agreement and/or have been
10
transferred in transactions in which registration rights hereunder have not been
assigned in accordance with this Agreement.
1.9 Rule 144 Reporting. With a view to making available the benefits
------------------
of certain rules and regulations of the SEC which may permit the sale of
restricted securities to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 under the 1933 Act, at all times;
(ii) use its commercially reasonable efforts to file with the
SEC in a timely manner all reports and other documents required of the Company
under the 1933 Act and the 1934 Act; and
(iii) so long as the Holders own any Registrable Securities,
furnish to the Holders upon request, a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 and of the 1933 Act
and the 1934 Act and such other reports and documents as each of the Holders may
reasonably request in availing itself of any rule or regulation of the SEC
allowing the Holders to sell any such securities without registration.
2. ASSIGNMENT.
----------
2.1 Assignment. Notwithstanding anything herein to the contrary, the
----------
registration rights of a Holder under Section 1 hereof may be assigned only to a
party who acquires from a Holder at least 30,000 Registrable Securities or as a
distribution made by a Holder which is a partnership to partners of such Holder
of Registrable Securities (such assignee shall be considered thereafter to be a
Holder); provided, however that no party may be assigned any of the foregoing
-------- -------
rights until Company is given written notice by the assigning party at the time
of such assignment stating the name and address of the assignee and identifying
the securities of Company as to which the rights in question are being assigned;
provided, further that any such assignee shall receive such assigned rights
-------- -------
subject to all the terms and conditions of this Rights Agreement, including
without limitation the provisions of this Section 2.
3. GENERAL PROVISIONS.
------------------
3.1 Notices. Any notice, request or other communication required or
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered, delivered by nationally recognized overnight
courier or if delivered by registered or certified mail, return receipt
requested, postage prepaid, as follows:
(a) if to Company, at:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
11
Facsimile:
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to Holders:
To the address set forth on Exhibit A hereto.
with a copy to:
The Thomson Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: 203-357-9762
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered on the date
of such delivery, when delivered by nationally recognized overnight courier on
the first business day following the date of such delivery or when delivered by
registered or certified mail on the third business day after the date of such
delivery.
3.2 Entire Agreement. This Rights Agreement and the Acquisition
----------------
Agreement constitute and contain the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersede any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
3.3 Amendment of Rights. Any provision of this Rights Agreement may
-------------------
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Company and Holders of a majority of all Registrable
Securities then outstanding. Any amendment or waiver effected in accordance
with this Section 3.3 shall be binding upon each Holder, each permitted
successor or assignee of such Holder and Company.
3.4 Governing Law. This Rights Agreement shall be governed by and
-------------
construed exclusively in accordance with the laws of the State of Delaware,
excluding that body of law relating to conflict of laws.
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3.5 Severability. If one or more provisions of this Rights Agreement
------------
are held to be unenforceable under applicable law, then such provision(s) shall
be excluded from this Rights Agreement and the balance of this Rights Agreement
shall be interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.
3.6 Third Parties. Nothing in this Rights Agreement, express or
-------------
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this Rights Agreement.
3.7 Successors And Assigns. Subject to the provisions of Section 2.1,
----------------------
the provisions of this Rights Agreement shall inure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties hereto.
3.8 Captions. The captions to sections of this Rights Agreement have
--------
been inserted for identification and reference purposes only and shall not be
used to construe or interpret this Rights Agreement.
3.9 Counterparts. This Rights Agreement may be executed in
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.10 Legends.
-------
Each Holder understands that prior to the effectiveness of the
registration statements certificates or other instruments representing any of
the Registrable Securities acquired by Holder will bear legends substantially
similar to the following, in addition to any other legends required by federal
or state laws:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE STATE
SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
Each Holder agrees that, in order to ensure and enforce compliance
with the restrictions imposed by applicable law and those referred to in the
foregoing legends, or elsewhere herein, Company may, prior to the effectiveness
of the registration statements issue appropriate "stop transfer" instructions to
its transfer agent, if any, with respect to any certificate or other instrument
representing Registrable Securities, or if Company transfers its own securities,
that it may make appropriate notations to the same effect in Company's records.
A certificate shall not bear such legend if the Holder shall have delivered to
the Company an opinion of counsel reasonably satisfactory to the Company to the
effect that the securities being
13
sold may be publicly sold without registration under the ▇▇▇▇ ▇▇▇. The foregoing
shall not be deemed to effect the obligations of the Company under this Rights
Agreement.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Rights Agreement
as of the date and year first above written.
COMPANY: STOCKHOLDER:
▇▇▇▇▇▇▇.▇▇▇ Inc. The ▇▇▇▇ Group, Inc.
By: /s/ ▇ ▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- ---------------------------
Its: V P Its: CEO
----------------------------- -----------------------------
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