Registration Rights Agreement - uDate.com Inc., Terrence Lee Zehrer, Paul Zehrer, Jason McVey and Leslie Rolson
UDATE.COM, INC.
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of March 28, 2001 is entered into by and among
uDate.com, Inc., a Delaware corporation which is successor to uDate.com, Inc., a
California corporation (the "Company"), and the individuals listed on Exhibit A
hereof (the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company is party to the Agreement and Plan of Merger dated
as of February 13, 2001, as amended on February 23, 2001 (the "Merger
Agreement"), among the Company, KCI Acquisition Corp., Kiss.com, Inc., and
Terrence Lee Zehrer; and
WHEREAS, the Company and the Purchasers desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Common Stock" means the common stock of the Company $.001, par
value per share.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Other Holders" shall have the meaning set forth in Section
2.1(b).
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registration Statement" means a registration statement filed by
the Company with the Commission for a public offering and sale of securities of
the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any other form for a
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similar limited purpose, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation).
"Registration Expenses" means the expenses described in Section
2.3.
"Registrable Shares" means (i) the Shares, (ii) any shares of
Common Stock received under any Note (as that term is defined in the Merger
Agreement), (iii) any shares of Common Stock, and any shares of Common Stock
issued or issuable upon the exercise of any other securities, acquired by the
Purchasers and (iv) any other shares of Common Stock issued in respect of such
shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of
Common Stock which are Registrable Shares shall cease to be Registrable Shares
upon (i) any sale pursuant to a Registration Statement or Rule 144 under the
Securities Act or (ii) any sale in any manner to a person or entity which, by
virtue of Section 3 of this Agreement, is not entitled to the rights provided
by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Selling Stockholder" means any Stockholder owning Registrable
Shares included in a Registration Statement.
"Shares" means the shares of Common Stock issued to the
Purchasers pursuant to Section 1.5 of the Merger Agreement.
"Stockholders" means the Purchasers and any persons or entities
to whom the rights granted under this Agreement are transferred by any
Purchasers, their successors or assigns pursuant to Section 3 hereof.
2. Registration Rights
2.1 Piggyback Registrations.
(a) Whenever the Company proposes to file a Registration
Statement, it will, prior to such filing, give written notice to all
Stockholders of its intention to do so; provided, that no such notice need be
given if no Registrable Shares are to be included therein as a result of a
determination of the managing underwriter pursuant to Section 2.1(b). Upon the
written request of a Stockholder or Stockholders given within 20 days after the
Company provides such notice (which request shall state the intended method of
disposition of such Registrable Shares), the Company shall use its best efforts
to cause all Registrable Shares which the Company has been requested by such
Stockholder or Stockholders to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
such Stockholder or Stockholders; provided that the Company shall have the right
to postpone or withdraw any registration effected pursuant to this Section 2.1
without obligation to any Stockholder.
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(b) If the registration for which the Company gives notice
pursuant to Section 2.1(a) is a registered public offering involving an
underwriting, the Company shall so advise the Stockholders as a part of the
written notice given pursuant to Section 2.1(a). In such event, the right of any
Stockholder to include its Registrable Shares in such registration pursuant to
Section 2.2 shall be conditioned upon such Stockholder's participation in such
underwriting on the terms set forth herein. All Stockholders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by the Company. Notwithstanding any other
provision of this Section 2.1, if the managing underwriter determines that the
inclusion of all shares requested to be registered would adversely affect the
offering, the Company may limit the number of Registrable Shares to be included
in the registration and underwriting. The Company shall so advise all holders of
Registrable Shares requesting registration, and the number of shares that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner. The Company shall have priority on shares to be
included in the registration, and the securities of the Company held by the
Stockholders and other holders of securities of the Company who are entitled, by
contract with the Company, to have securities included in such a registration
(the "Other Holders") shall be excluded from such registration and underwriting
to the extent that the managing underwriter determines that the inclusion of
such shares held by the Stockholders and the Other Holders would adversely
affect the offering. If the managing underwriter determines that some but less
than all of the number of Registrable Shares that the Stockholders and Other
Holders seek to include in the registration and underwriting can be included in
such registration without adversely affecting the offering, the number of shares
that may be included in such registration and underwriting shall be allocated
among all Stockholders and Other Holders requesting registration in proportion,
as nearly as practicable, to the respective number of shares of Common Stock (on
an as-converted basis) which they held at the time the Company gives the notice
specified in Section 2.1(a). If any Stockholder or Other Holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among other requesting Stockholders and Other
Holders pro rata in the manner described in the preceding sentence. If any
holder of Registrable Shares or any officer, director or Other Holder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company, and any Registrable Shares
or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
2.2 Registration Procedures.
(a) If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any Registrable Shares under the Securities Act, the Company shall:
(i) file with the Commission a Registration
Statement with respect to such Registrable Shares and use its best efforts to
cause that Registration Statement to become effective as soon as possible;
(ii) as expeditiously as possible prepare and file
with the Commission any amendments and supplements to the Registration Statement
and the prospectus included in the Registration Statement as may be necessary to
comply with the provisions of the
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Securities Act (including the anti-fraud provisions thereof) and to keep the
Registration Statement effective for 12 months from the effective date or such
lesser period until all such Registrable Shares are sold;
(iii) as expeditiously as possible furnish to each
Selling Stockholder such reasonable numbers of copies of the Prospectus,
including any preliminary Prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such Selling Stockholder may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Shares owned by such Selling Stockholder;
(iv) as expeditiously as possible use its best
efforts to register or qualify the Registrable Shares covered by the
Registration Statement under the securities or Blue Sky laws of such states as
the Selling Stockholders shall reasonably request, and do any and all other acts
and things that may be necessary or desirable to enable the Selling Stockholders
to consummate the public sale or other disposition in such states of the
Registrable Shares owned by the Selling Stockholder; provided, however, that the
Company shall not be required in connection with this paragraph (iv) to qualify
as a foreign corporation or execute a general consent to service of process in
any jurisdiction;
(v) as expeditiously as possible, cause all such
Registrable Shares to be listed on each securities exchange or automated
quotation system on which similar securities issued by the Company are then
listed;
(vi) promptly provide a transfer agent and registrar
for all such Registrable Shares not later than the effective date of such
registration statement;
(vii) promptly make available for inspection by the
Selling Stockholders, any managing underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant or other
agent retained by any such underwriter or selected by the Selling Stockholders,
all financial and other records, pertinent corporate documents and properties of
the Company and cause the Company's officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
Registration Statement;
(viii) as expeditiously as possible, notify each
Selling Stockholder, promptly after it shall receive notice thereof, of the time
when such Registration Statement has become effective or a supplement to any
Prospectus forming a part of such Registration Statement has been filed; and
(ix) as expeditiously as possible following the
effectiveness of such Registration Statement, notify each seller of such
Registrable Shares of any request by the Commission for the amending or
supplementing of such Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable
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Shares and return all Prospectuses to the Company. The Company shall promptly
provide the Selling Stockholders with revised Prospectuses and, following
receipt of the revised Prospectuses, the Selling Stockholders shall be free to
resume making offers of the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all Selling Stockholders
to such effect, and, upon receipt of such notice, each such Selling Stockholder
shall immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.2(c) to suspend sales of Registrable Shares for a period in excess of
60 days in any 365-day period.
2.3 Allocation of Expenses. The Company will pay all Registration
Expenses for all registrations under this Agreement. For purposes of this
Section, the term "Registration Expenses" shall mean all expenses incurred by
the Company in complying with this Agreement, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Company and the fees and expenses of one counsel
selected by the Selling Stockholders to represent the Selling Stockholders,
state Blue Sky fees and expenses, and the expense of any special audits incident
to or required by any such registration, but excluding underwriting discounts,
selling commissions and the fees and expenses of Selling Stockholders' own
counsel (other than the counsel selected to represent all Selling Stockholders).
2.4 Indemnification and Contribution.
(a) In the event of any registration of any of the
Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless each Selling Stockholder, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such Selling Stockholder or underwriter within the meaning of the
Securities Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Selling Stockholder, underwriter or
controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such Selling Stockholder, underwriter and each such
controlling person for any
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legal or any other expenses reasonably incurred by such Selling Stockholder,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or omission made in such Registration Statement, preliminary prospectus or
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such Selling Stockholder, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the
Registrable Shares under the Securities Act pursuant to this Agreement, each
Selling Stockholder, severally and not jointly, will indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such Selling Stockholder
furnished in writing to the Company by or on behalf of such Selling Stockholder
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however, that the
obligations of a Selling Stockholder hereunder shall be limited to an amount
equal to the net proceeds to such Selling Stockholder of Registrable Shares sold
in connection with such registration.
(c) Each party entitled to indemnification under this
Section (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 the 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 litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); 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 except to the extent
that the Indemnifying Party is adversely affected by such failure. The
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall pay such expense if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding; provided further that in no event shall the
Indemnifying Party be required to pay the expenses of more than one law firm per
jurisdiction as counsel for the Indemnified Party. The Indemnifying
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Party also shall be responsible for the expenses of such defense if the
Indemnifying Party does not elect to assume such defense. 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 of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in this Section 2.4
is due in accordance with its terms but for any reason is held to be unavailable
to an Indemnified Party in respect to any losses, claims, damages and
liabilities referred to herein, then the Indemnifying Party shall, in lieu of
indemnifying such Indemnified Party, contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities to which such party may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the
Selling Stockholders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company and
the Selling Stockholders shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact related
to information supplied by the Company or the Selling Stockholders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Selling
Stockholders agree that it would not be just and equitable if contribution
pursuant to this Section 2.4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph of Section 2.4, (a) in no case shall any one Selling Stockholder be
liable or responsible for any amount in excess of the net proceeds received by
such Selling Stockholder from the offering of Registrable Shares and (b) the
Company shall be liable and responsible for any amount in excess of such
proceeds; provided, however, that 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. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.
2.5 Information by Holder. Each holder of Registrable Shares
included in any registration 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 required in connection
with any registration, qualification or compliance referred to in this
Agreement.
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3. Transfers of Rights. This Agreement, and the rights and
obligations of each Purchaser hereunder, may be assigned by such Purchaser to
his spouse, any member of his immediate family, or any trust for the benefit of
the foregoing, and such transferee shall be deemed a "Purchaser" for purposes of
this Agreement; provided that the transferee provides written notice of such
assignment to the Company and agrees in writing to be bound hereby.
4. General.
(a) Severability. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(b) Specific Performance. In addition to any and all
other remedies that may be available at law in the event of any breach of this
Agreement, each Purchaser shall be entitled to specific performance of the
agreements and obligations of the Company hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
(c) Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Delaware
(without reference to the conflicts of law provisions thereof).
(d) Notices. All notices, requests, consents, and
other communications under this Agreement shall be in writing and shall be
deemed delivered (i) four business days after being sent by registered or
certified mail, return receipt requested, postage prepaid or (ii) two business
days after being sent via a reputable international overnight courier service
guaranteeing next business day delivery, in each case to the intended recipient
as set forth below:
If to the Company, to uDate.com, Inc., New Enterprise House, St. Helens
Street, Derby England DE1 3GY, United Kingdom, Phone: +44 1332-268700, Fax: +44
20 7681-1226, Attention: Martin Clifford, or at such other address or addresses
as may have been furnished in writing by the Company to the Purchaser, with a
copy to Hale and Dorr LLP, The Willard Office Building , 1455 Pennsylvania Ave.,
N.W., Washington, D.C. 20004 , Phone: (202) 942-8400, Fax: (202) 942-8484,
Attention: Michael J. Levitin, Esq.; or
If to a Purchaser, at his or her address set forth on Exhibit A, or at
such other address or addresses as may have been furnished to the Company in
writing by such Purchaser.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
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(e) Complete Agreement. This Agreement constitutes
the entire agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
(f) Amendments and Waivers. Any term of this
Agreement may be amended or terminated and the observance of any term of this
Agreement may be waived with respect to all parties to this Agreement (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of at
least 75% of the Registrable Shares held by all of the Stockholders.
Notwithstanding the foregoing, this Agreement may be amended or terminated, and
any right hereunder may be waived with respect to all parties to this Agreement
with the consent of the holders of less than all Registrable Shares only in a
manner which applies to all such holders in the same fashion. Any such
amendment, termination or waiver effected in accordance with this Section 3(f)
shall be binding on all parties hereto, even if they do not execute such consent
and the Company. No waivers of or exceptions to any term, condition or provision
of this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
(g) Pronouns. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.
(h) Counterparts; Facsimile Signatures. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which together shall constitute one and the
same document. This Agreement may be executed by facsimile signatures.
(i) Section Headings. The section headings are for
the convenience of the parties and in no way alter, modify, amend, limit or
restrict the contractual obligations of the parties.
(j) Termination. The rights provided by this
Agreement shall terminate with respect to any Stockholder, and with respect to
any shares of Common Stock owned by such Stockholder, when such person could
sell all of his Registrable Shares pursuant to Rule 144 in two consecutive
calendar quarters.
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Executed as of the date first written above.
UDATE.COM, INC.
By:/s/ MARTIN R. CLIFFORD
----------------------------
Name: Martin R. Clifford
Title: Executive Vice President
PURCHASERS:
By:/s/ TERRENCE LEE ZEHRER
----------------------------
Terrence Lee Zehrer
By:/s/ PAUL ZEHRER
---------------------------
Paul Zehrer
By:/s/ JASON MCVEY
---------------------------
Jason McVey
By:/s/ LESLIE ROLSON LA MARCA
---------------------------
Leslie Rolson La Marca
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Exhibit A
Purchasers
Name and Address:
1. Terrence Lee Zehrer
521 Fifth Avenue W, #1004
Seattle, Washington 98119
2. Paul Zehrer
40 Grand View Avenue
San Francisco, California 84114
3. Jason McVey
3611 Hoyt Avenue
Everett, Washington 98201
4. Leslie Rolson
6229 6th Avenue NW
Seattle, Washington 98107
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