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EXHIBIT 4.13
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of February 13, 1996, among N2K
INC., a Pennsylvania corporation formerly known as Telebase Systems, Inc. (the
"Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ (collectively, the
"Shareholders").
W I T N E S S E T H:
WHEREAS, N2K Inc., a New York corporation ("N2K"), and the Company have
entered into a Merger Agreement, dated as of January __, 1996 (the "Merger
Agreement") to merge with each other (the "Merger");
WHEREAS, the Shareholders collectively own all of the outstanding
capital stock of N2K;
WHEREAS, as consideration in the Merger the Shareholders will receive
Common Stock and Series E Preferred Stock of the Company (the "Merger
Consideration"); and
WHEREAS, as a condition to the consummation of the Merger, the Company
has agreed to provide to the Shareholders certain registration rights pursuant
to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement, capitalized terms used
herein shall have the meanings set forth in the preambles hereto and in this
Section 1.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the common stock, par value $.001
per share, of the Company or, in the case of a conversion, reclassification or
exchange of such shares of such Common Stock, shares of the stock into or for
which such shares of Common Stock shall be converted, reclassified or exchanged,
and all provisions of this Agreement shall be applied appropriately thereto and
to any stock resulting from any subsequent conversion, reclassification or
exchange therefor.
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"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
"Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the Commission which permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.
"Holder" shall mean any holder of Registrable Securities;
provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a sale to the public under Rule
144 under the Securities Act chain not be considered a Holder.
"Initiating Holders" shall mean Holders representing (on a
fully converted basis) at least thirty percent (30%) of the total number of
shares of Common Stock issued or issuable upon conversion of the Series E
Preferred Stock acquired by the Shareholders as part of the Merger Consideration
(and any other or additional shares, securities or property that may hereafter
be issuable upon the conversion of the Series E Preferred Stock) held by the
Holders.
"Initial Public Offering" means an initial public offering of
Common Stock of the Company or options, preferred stock, warrants or other
securities convertible into or exchangeable for Common Stock, pursuant to an
effective registration statement (other than a registration statement on Form
S-4 or Form S-8 or any successor forms thereto) filed by the Company under the
Securities Act, which offering generates net proceeds to the Company of at least
$5,000,000. An Initial Public Offering shall be deemed consummated upon the
first sale under the related registration statement or in the case of an
offering which is not underwritten, when the related registration statement
first becomes effective.
"Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a
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registration statement with the Commission in compliance with the Securities Act
and applicable rules and regulations thereunder, and the declaration or ordering
of the effectiveness of such registration statement by the Commission.
"Registrable Securities" shall mean (i) the shares of Common
Stock issued or issuable upon conversion of the Series E Preferred Stock (and
any other or additional shares, securities or property that may hereafter be
issuable upon conversion of the Series E Preferred Stock) acquired by the
Shareholders as part of the Merger Consideration, and (ii) the shares of Common
Stock acquired by the Shareholders as cart of the Merger Consideration and the
shares of Common Stock issuable upon the exercise of any options received by the
Shareholders pursuant to the Merger Agreement; provided, however, that the
shares of Common Stock shall only be treated as Registrable Securities hereunder
if and so long as they have not been sold in a registered public offering or
have not been sold to the public pursuant to Rule 144 under the Securities Act.
"Registration Expenses" shall mean all expenses incurred by
the Company in compliance herewith, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, and, in connection with a registration pursuant to
Section 3 hereof, the reasonable fees and expenses (subject to documentation
thereof) of one counsel for all holders, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal stature enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
"Selling Expenses" shall mean all underwriting discounts and
commissions applicable to the sale of Registrable Securities.
"Series E Preferred Stock" shall mean the Series E Preferred
Stock, par value $.001 per share, of the Company.
"Series E Shares" shall mean the shares of Common Stock issued
or issuable upon exercise of the conversion of the Series E Preferred Stock.
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2. Demand Registration.
2.1 Request for Registration. Subject to Section 2.6 hereof,
at any time and from time to time after an Initial Public Offering by the
Company, if the Company shall receive from the Initiating Holders a written
request that the Company effect any registration with respect to Registrable
Securities, the Company will:
(a) promptly give written notice of the
proposed registration to all other Holders; and
(b) as soon as practicable, use its
best efforts to effect such registration (including, without
limitation, the execution of an undertaking to file posteffective
amendments, appropriate qualifications under the blue sky or other
state securities laws reasonably requested by Initiating Holders and
appropriate compliance with applicable regulations issued under the
Securities Act) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request
given within forty-five (45) days after receipt of such written notice
from the Company; Provided that the Company shall not be obligated to
effect, or to take any action to effect, any such registration pursuant
to this Section 2:
(i) 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 in such
jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder; or
(ii) less than forty-five (45)
calendar days after the effective date of any registration declared or
ordered effective other than a registration on Form S-3 or Form S-8.
Subject to the foregoing clauses (i) and (ii), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
or requests of the Initiating Holders; provided, that the Company shall be
required to comply with no more than two (2) such requests for registration
pursuant to this Section 2.1.
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2.2 Additional Shares to be Included. The registration
statement filed pursuant to the request of the Initiating Holders may, subject
to the provisions of Section 2.4 below, include (a) ocher securities of the
Company (the "Additional Shares") which are held by (i) officers or directors of
the Company who, by virtue of agreements with the Company, are entitled to
include their securities in any such registration or (ii) other Persons who, by
virtue of written agreements with the Company, are entitled to include their
securities in any such registration (the "Other Stockholders"), and (b)
securities of the Company being sold for the account of the Company.
2.3 Underwriting.
(a) If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 2 and the Company shall include such information in the
written notice to other Holders referred to in Section 2.1 above. The right of
any Holder to registration pursuant to this Section 2 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein and subject to the limitations provided herein. A Holder may elect to
include in such underwriting all or a part of the Registrable Securities he
holds.
(b) The Company shall (together with all
Holders, officers, directors and Other Stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representative of the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders, which underwriter(s) shall be reasonably acceptable to the Company.
2.4 Limitations on Shares to be Included.
Notwithstanding any other provision of this Section 2, if the representative of
the underwriters advises the Initiating Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, first
the Additional Shares shall be excluded from such registration to the extent so
required by such limitation, then securities being sold for the account of the
Company shall be excluded from such registration and if a limitation on the
number of shares is still required, the number of shares that may be included in
the registration and underwriting shall be allocated among all Holders,
including Initiating Holders, in proportion, as nearly practicable, to the
respective amounts of Registrable Securities and other
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securities which they have requested to be included in such registration
statement. If the Company or any Holder, officer, director or Other Stockholder
who has requested inclusion in such registration as provided above disapproves
of the terms of any such underwriting, such Person may elect to withdraw such
Person's Registrable Securities or Additional Shares therefrom by written notice
to the Company and the underwriter and the Initiating Holders. Any Registrable
Securities or other securities excluded shall also be withdrawn from such
registration. No Registrable Securities or Additional Shares excluded from such
registration by reason of such underwriters' marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with this Section 2.4, the Company or underwriter or underwriters
selected as provided above may round the number of Registrable Securities of any
Holder which may be included in such registration to the nearest 100 shares.
2.5 Additional Demand Registration. If with respect to the
last registration permitted to be exercised by the Holders of Registrable
Securities under this Section 2, the Holders are unable to register all of their
Registrable Securities because of the operation of Section 2.4 hereof, such
Holders shall be entitled to require the Company to effect one additional
registration to afford the Holders an opportunity to register all such
Registrable Securities.
2.6 Demand Limitations. Notwithstanding any other provision of
this Section 2, the Registrable Securities entitled to the registration rights
provided for in Section 2.1 hereof shall be limited to subsection (i) of the
definition of Registrable Securities set forth in Section 1 hereof.
3. Company Registration.
3.1 If the Company shall determine to register under the
Securities Act any of its equity securities or securities convertible into
equity securities either for its own account or the account of a security holder
or holders exercising any demand registration rights, other than a registration
relating solely to employee benefit plans, or a registration relating solely to
a Commission Rule 145 transaction, the Company will:
(a) promptly give to each Holder written
notice thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and
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(b) include in such registration (and,
subject to Section 2.1(b)(i), any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or request, made by any Holder within
thirty (30) days after receipt of the written notice from the Company described
in clause (a) above, except as set forth in Section 3.3 below. Such written
request may specify all or a part of a Holder's Registrable Securities.
3.2 Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a). The right of any Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any officers, directors or Other Stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.
3.3 Limitations on Shares to be Included. Notwithstanding any
other provision of this Section 3, if the representative of the underwriters
advises the Company in writing that marketing factors require a limitation or
elimination on the number of shares to be underwritten, the representative may
(subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated as follows: first, to the
Company for securities being sold for its own account; second, among all
Holders; thereafter, the number of shares that may be included in the
registration statement and underwriting shall be allocated among all officers,
directors or Other Stockholders in each case in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities or Additional
Shares which they had requested to be included in such registration at the time
of filing the registration statement. If any Holder of Registrable Securities or
any officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable
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Securities or other securities excluded or withdrawn from such underwriting
shall also be withdrawn from such registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration.
4. Registration on Form S-3. In addition to their rights set forth in
Sections 2 and 3 above, if at any time (i) Initiating Holders request that the
Company file a registration statement on Form S-3 (or any successor form
thereto) for a public offering of all or any portion of the Registrable
Securities (subject to the proviso below) held by such requesting Holder or
Holders, and (ii) the Company is a registrant entitled to use Form S-3 (or any
successor form thereto) to register such securities, then the Company shall use
its best efforts to register (including by means of a shelf registration
pursuant to Rule 415 under the Securities Act if so requested in such request)
under the Securities Act on Form S-3 (or any successor form thereto), for public
sale in accordance with the method of disposition specified in such notice, the
number of shares of Registrable Securities specified in such notice; provided,
however, that notwithstanding any other Provision of this Section 4, the
Registrable Securities entitled to the registration rights provided for in this
Section 4 shall be limited to subsection (i) of the definitions of Registrable
Securities set forth in Section 1 hereof. Such rights to registration on Form
S-3 shall be unlimited, provided, that the Company shall in no event be
obligated to cause the effectiveness of more than one such registration in any
calendar year. Registrations effected pursuant to this Section 4 shall not be
counted as demands for registration or registrations effected pursuant to
Section 2 or 3, respectively.
5. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2, 3 or 4 of this Agreement shall be borne by the Company, except that
Selling Expenses shall be come pro rata by each Holder in accordance with the
number of shares sold.
6. Registration Procedures.
6.1 In the case of each registration effected by the Company
pursuant to this Agreement, the Company will keep each Holder advised in writing
as to the initiation of each registration and as to the completion thereof and
will, at its expense:
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(a) use its best efforts to keep such
registration effective for a period of 180 days or until the Holder or Holders
have completed the distribution described in the registration statement relating
thereto, whichever first occurs; provided, however, that the Company will keep
such registration effective for longer than 180 days if the costs and expenses
associated with such extended registration are borne by the selling Holders; and
provided, further, that in the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 180-day period shall, at the cost and expense of the
Company, be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a continuous or
delayed oasis, and provided, further, that applicable rules and regulations
under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment which (y)
includes any prospectus required by Section 10(a)(3) of the Securities Act or
(z) reflects facts or events representing a material or fundamental change in
the information set forth in the registration statement, the incorporation by
reference of information otherwise required to be included in such
post-effective amendment covered by (y) and (z) above to be contained in
periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in
the registration statement;
(b) Prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement;
(c) Furnish such number of prospectuses and
other documents incident thereto, including any amendment of or supplement to
the prospectus, as a Holder from time to time may reasonably request;
(d) Notify each seller of Registrable
Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in the
light of the circumstances then existing, and at the request of any such seller,
prepare and furnish to such
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seller a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an 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 not misleading or incomplete
in the light of the circumstances then existing;
(e) List all such Registrable Securities
registered in such registration on each securities exchange or automated
quotation system on which the Common Stock of the Company is then listed;
(f) Provide a transfer agent and registrar
for all Registrable Securities and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration;
(g) Make available for inspection by any
seller of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney or
accountant retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers and directors to supply all information reasonably
requested by any such seller, underwriter, attorney or accountant in connection
with such registration statement;
(h) Furnish to each underwriter upon request
a signed counterpart, addressed to each such underwriter, of
(i) an opinion of counsel for the
Company, dated the effective date of the registration statement in form
reasonably acceptable to the Company and such counsel, and
(ii) "comfort" letters signed by the
Company's independent public accountants who have examined and reported
on the Company's financial statements included in the registration
statement, to the extent permitted by the standards of the American
Institute of Certified Public Accountants,
covering such matters as are customarily covered in opinions of issuers counsel
and accountants' "comfort" letters delivered to underwriters in underwritten
public offerings of securities;
(i) Furnish to each selling Holder upon
request a copy of all documents filed with and all
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correspondence from or to the Commission in connection with any such offering;
and
(j) Make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months, but not more than eighteen months, beginning with the
first month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
6.2 It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement that the Holders
proposing to register Registrable Securities shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them, and
their intended method of Distribution of such Registrable Securities as the
Company shall reasonably request and as shall be required in connection with the
action to be taken by the Company.
6.3 In connection with the preparation and filing of each
registration statement under this Agreement, the Company will give the Holders
on whose behalf such Registrable Securities are to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each such Holder such
access to the Company's books and records and such opportunities to discuss the
business of the Company with its officers, its counsel and the independent
public accountants who have certified the Company's financial statements, as
shall be necessary, in the opinion of such Holders or such underwriters or their
respective counsel, in order to conduct a reasonable and diligent investigation
within the Leaning of the Securities Act.
7. Indemnification.
7.1 Indemnification by the Company. The Company will indemnify
each Holder, each of its officers, directors and partners, and each Person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
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notification or the like) incident to any such registration, qualification or
compliance, or based on 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, or any violation by the Company of the Securities Act or
any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such claim, loss, damage, liability
or action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission (i) made in reliance upon and based
upon written information furnished to the Company by such Holder or underwriter
and stated to be specifically for use therein or (ii) contained or made in any
preliminary prospectus and corrected in the final prospectus and any such loss,
liability, claim, damage or expense suffered or incurred by any Holder or any
Underwriter resulted from any action, claim or suit by any person who purchased
securities which are the subject thereof from any Holder or any underwriter and
such Holder or underwriter failed to deliver or provide a copy of the prospectus
to such person with or prior to the confirmation of the sale of such securities
sold to such person in any case where delivery is required by the Securities Act
or the rules and regulations thereunder, unless such failure to deliver or
provide a copy of the final prospectus was a result of noncompliance by the
Company with Section 6.1(c) of this Agreement.
7.2 Indemnification by the Holders. Each Holder will, if
Registrable Securities held by him are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company (other than such Holder) or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, each
other such Holder and each of their officers, directors and partners, and each
person controlling such Holder or other stockholder, against all claims, losses,
damages, expenses and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to
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state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company, each of
its directors and officers, each underwriter or control person, each other
Holder and each of their officers, directors and partners and each person
controlling such Holder or other stockholder for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein.
7.3 Notices of Claims, Procedures, etc. Each party entitled to
indemnification under this Section 7 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
he defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 7 unless such failure is prejudicial to the
ability of Indemnifying Party to defend such claim or action. Notwithstanding
the foregoing, such Indemnified Party shall have the right to employ its own
counsel in any such litigation, proceeding or other action if (i) the employment
of such counsel has been authorized by the Indemnifying Party, in its sole and
absolute discretion, or (ii) the named parties in any such claims (including any
impleaded parties) include any such Indemnified Party and the Indemnified Party
and the Indemnifying Party shall have been advised in writing (in suitable
detail) by counsel to the Indemnified Party either (A) that there may be one or
more legal defenses available to such Indemnified Party which are different from
or additional to those available to the Indemnifying Party, or (B) that there is
a conflict of interest by virtue of the Indemnified Party and the Indemnifying
Parties having common counsel, in any of which events, the legal fees and
expenses of a single counsel for all Indemnified Parties with respect to each
such claim, defense thereof, or counterclaims thereto shall be borne by
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Indemnifying Party. 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 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. Each Indemnified Party shall cooperate to the extent reasonably
required and 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 defense of such claim and litigation
resulting therefrom.
8. Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
9. Transfer or Assignment of Registration Rights. The rights to cause
the Company to register securities granted by the Company under this Agreement
may be transferred or assigned by a Holder to a transferee or assignee of any
Registrable Securities, provided that the Company is given written notice at or
prior to the time of said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned, and provided
further that the transferee or assignee of such rights assumes in writing the
obligations of a Holder under this Agreement to the Company and other Holders in
effect at the time of transfer under all effective agreements.
10. Reports Under Exchange Act. After an Initial Public Offering by the
Company, with a view to making available to the Holders the benefits of Rule 144
under the Securities Act and any other rule or regulation of the Commission that
may at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep Public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after ninety (90) days (or such shorter period as may then be permitted by the
rules and regulations of the Commission in effect at such time) after the
effective date of the first registration statement
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filed by the Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal year
in which the first registration statement filed by the Company for the offering
of its securities to the general public is declared effective;
(c) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
(d) furnish to any Holder forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144 under the Securities Act (at any time after ninety (90) days after the
effective date of the first registration statement filed by the Company, or such
shorter period as may be then permitted by the rules and regulations of the
Commission in effect at such time), the Securities Act and the Exchange Act (at
any time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual and
quarterly reports of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably requested
in availing any Holder of any rule or regulation of the Commission which permits
the selling of any such securities without registration or pursuant to such
form.
11. No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which s inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement.
12. Benefits of Agreement; Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, legal representatives and heirs. This
Agreement does not create, and shall not be construed as creating any rights
enforceable by any other Person.
13. Complete Agreement. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this
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Agreement shall be valid unless made in writing and signed, on the one hand, by
the Holders of a majority of the Registrable Securities then outstanding and, on
the other, by the Company.
14. Notices. All notices, offers, acceptances and other communications
required or permitted to be given or to otherwise be made to any party to this
Agreement shall be deemed to be sufficient if contained in a written instrument
delivered by hand, first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, if to the Company, at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
if to any Holder, at the address of such Holder as set forth in the stock
transfer books of the Corporation.
All such notices and communications shall be deemed to have
been duly given, at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
the next business day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery. Any party may change the address to
which each such notice or communication shall be sent by giving written notice
to tie other parties of such new address in the manner provided herein for
giving notice.
15. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York without
giving effect to the provisions, policies or principles thereof respecting
conflict or choice of laws.
16. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
17. Severability. Any provision of this Agreement which is determined
to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
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N2K INC.
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Name:
Title:
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