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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 24, 1999
MESSAGEMEDIA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-21751 33-0612860
(Commission File No.) (IRS Employer Identification No.)
6685 GUNPARK DRIVE EAST, SUITE 240
BOULDER, COLORADO 80301
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (303) 440-7550
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ITEM 5. OTHER EVENTS.
On March 25, 1999, MessageMedia, Inc. ("MessageMedia") announced its
agreement to sell $10 million of its Common Stock to Pequot Private Equity Funds
(the "Offering"). The press release issued by MessageMedia dated March 25, 1999
is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by
reference herein.
On March 26, 1999, MessageMedia consummated the Offering and issued and
sold an aggregate of 2,352,942 shares of its Common Stock to Pequot Private
Equity Funds. The Company has agreed to provide certain registration rights to
the investors in the Offering as set forth in the Registration Rights Agreement
filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by
reference herein.
In connection with the Offering, Gerald A. Poch of Pequot Equity Funds,
joined the Board of Directors of MessageMedia which was expanded from seven to
nine directors. There is one vacancy on the Board.
The corporate headquarters of MessageMedia have officially relocated to
6685 Gunpark Drive East, Suite 240, Boulder, Colorado 80301. The symbol for the
Company's Common Stock as reported on the Nasdaq National Market has been
changed effective April 1, 1999 to "MESG."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
99.1 Press Release dated March 25, 1999.
99.2 Registration Rights Agreement dated March 24, 1999 between
MessageMedia and each of Pequot Private Equity Fund, L.P. and
Pequot Offshore Private Equity Fund, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MESSAGEMEDIA, INC.
Dated: April 5, 1999 By: /s/ Dennis Cagan
-------------------------------
Dennis Cagan
Chief Executive Officer
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INDEX TO EXHIBITS
99.1 Press Release dated March 25, 1999.
99.2 Registration Rights Agreement dated March 24, 1999 between
MessageMedia and each of Pequot Private Equity Fund, L.P. and
Pequot Offshore Private Equity Fund, Inc.
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EXHIBIT 99.1
MESSAGEMEDIA INC. ANNOUNCES $10 MILLION
INVESTMENT BY PEQUOT PRIVATE EQUITY FUNDS
GERALD A. POCH TO JOIN BOARD OF DIRECTORS AS CO-CHAIRMAN
BOULDER, COLO. - March 25, 1999 - MessageMedia Inc. (NASDAQ: MAIL), the leading
provider of email-based direct marketing and customer relationship management
services, announced today that Pequot Private Equity Funds have invested $10
million in MessageMedia in exchange for newly issued shares of Common Stock.
Gerald Poch, a principal of Pequot Capital Management, will join the board of
directors of MessageMedia and will serve as co-chairman of the board with
Bradley Feld, and will replace Ronald D. Fisher, vice- chairman of SOFTBANK
Holdings, who will continue as a director of the Company.
"We are very excited to be investing in and working closely with MessageMedia.
Over the past year, MessageMedia has emerged as the leading provider of email
messaging services through its advanced technology and comprehensive service
offerings," said Jerry Poch of Pequot Capital. "There is an explosive growth of
electronic-based messages and Internet-based direct marketing services as
companies utilize the web and electronic technology to communicate efficiently
with their customers. Already, MessageMedia is managing the distribution,
receipt, and processing of millions of messages for over 60 leading customers,
including CMP Media, E*TRADE, Intuit, USA Today, GeoCities, and Barclays Bank.
Pequot and I look forward to participating in this market and working with a key
industry player in electronic marketing and customer relationship services."
"Pequot Capital's investment and Jerry Poch's commitment to the business will
provide the resources and leadership to maintain and expand MessageMedia's
leading position in the rapidly growing market for email-based customer
relationship management and direct marketing services," stated Bradley Feld, co-
chairman of MessageMedia. "Jerry's vast operational and acquisition experience
at AmeriData Technologies and GE Capital ITS, as well as his 25 years of senior
executive leadership in technology businesses, will help us dramatically scale
MessageMedia through both internal growth and acquisition. We are pleased with
Pequot Capital's decision to invest in our Company, and we welcome their support
and involvement in the execution of our strategy going forward."
ABOUT PEQUOT CAPITAL MANAGEMENT, INC.
The Pequot Private Equity Funds are the private placement/direct investment arm
of Pequot Capital Management, Inc. The Pequot Private Equity Funds invest in
public and late stage private companies in information technology,
telecommunications, and healthcare. Pequot Capital Management, Inc. is a
research-intensive investment firm with more than $5 billion in assets under
management. Pequot Capital, which is 100% employee-owned, is headquartered in
Westport, Connecticut, with offices in New York City and California.
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ABOUT MESSAGEMEDIA INC.
MessageMedia (NASDAQ: MAIL) is the leading provider of email-based customer
relationship management and direct marketing services. The Company offers a
comprehensive suite of outsource messaging services for information delivery,
permission-based direct marketing and ongoing customer communications using
industry standard Internet protocols. MessageMedia's customer portfolio
includes more than 60 customers from the financial services, publishing, direct
marketing, retailing and electronic commerce industries. Clients include
E*TRADE, USA Today, GeoCities, Intuit, CMP Media, Barclays Bank and Bertelsmann.
MessageMedia is a member of the SOFTBANK family of companies.
ABOUT SOFTBANK HOLDINGS INC.
SOFTBANK Holdings Inc. is the holding company for all of SOFTBANK Corp.'s U.S.
based activities. Its major operating companies include Ziff-Davis (NYSE: ZD),
Kingston Technology Company and UTStarcom. SOFTBANK is the largest shareholder
of Yahoo! (NASDAQ: YHOO) and E*TRADE (NASDAQ: EGRP), and a minority investor in
The Rights Exchange, GeoCities (NASDAQ: GCTY), CyberCash (NASDAQ: CYCH), and E-
LOAN. SOFTBANK and its affiliates own approximately 53% of the outstanding
common stock of MessageMedia Inc. (NASDAQ: MAIL). In addition, through
affiliated venture funds in the U.S. and Japan, the SOFTBANK Group has made more
than 70 investments in Internet companies. www.softbank.com
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act. With
the exception of the historical information contained in this release, the
matters described herein contain forward-looking statements that involve risk
and uncertainties. These risk factors include, but are not limited to, the
integration of a new senior management team, the Company's limited operating
history, the integration of recent acquisitions, the anticipated fluctuations in
operating results, the uncertain acceptance of new services being offered, and
undeveloped and rapidly changing market. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. MessageMedia undertakes no obligation to release publicly the
result of any revisions to these forward- looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
MessageMedia Inc.
4104 Sorrento Valley Boulevard, Suite 200, San Diego,California 92121
Phone: (619) 410-3700, Fax: (619) 410-3701 www.messagemedia.com
Investor Relations inquiries should be sent to [email protected]
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EXHIBIT 99.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, dated as of March 24, 1999 (the
"AGREEMENT"), is by and among MessageMedia, Inc., a Delaware corporation (the
"COMPANY"), and each of the individuals or entities signatory hereto (each a
"STOCKHOLDER" and together the "STOCKHOLDERS").
W I T N E S S E T H :
WHEREAS, the Company is authorized to issue a total of 100,000,000
shares of Common Stock, $.001 par value, of which, on February 28, 1999,
40,549,968 shares are issued and outstanding, fully paid and nonassessable
("COMMON STOCK");
WHEREAS, pursuant to that certain Purchase Agreement dated as of
March 24, 1999, among the Company and the Stockholders (the "PURCHASE
AGREEMENT"), the Company has agreed to sell and cause to be issued 2,352,942
shares of Common Stock (the "SHARES");
WHEREAS, upon the consummation of the transactions contemplated by
the Purchase Agreement, the Stockholders will own the number of shares of Common
Stock as set forth opposite their respective names on SCHEDULE I hereto; and
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Purchase Agreement that the parties enter into this
Agreement.
NOW THEREFORE, in consideration of the mutual promises, agreements
and covenants set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. The following terms when used in this Agreement,
including its preamble and recitals, shall, except where the context otherwise
requires, have the following meanings, such meanings to be equally applicable to
the singular and plural forms thereof:
"AFFILIATE" shall mean, with respect to any Person, any person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"CLOSING DATE" shall mean, the date of the consummation of the
purchase of the Shares by the Stockholders from the Company.
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"PERSON" shall mean and include an individual, a corporation, a
limited liability company, an association, a partnership, a joint venture, a
trust or estate, a government or any department or agency thereof, or any other
entity or governmental body.
"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with its obligations under Sections 2.2
and 2.3 hereof, including without limitation, all SEC, NASD and stock exchange
or NASDAQ registration and filing fees and expenses, fees and expenses of
compliance with applicable state securities or "blue sky" laws (including,
without limitation, reasonable fees and disbursements of counsel for the
underwriters in connection with "blue sky" qualifications of securities
registered in accordance with this Agreement), printing expenses, messenger and
delivery expenses, the fees and expenses incurred in connection with the listing
of such securities to be registered on each securities exchange or national
market system on which such securities are listed, fees and disbursements of
counsel for the Company and all independent certified public accountants
retained by the Company (including the expenses of any annual audit and "cold
comfort" letters required by or incident to such performance and compliance),
all reasonable fees and expenses of one counsel to the Stockholders in the case
of a Piggyback Registration or in the case of the exercise of a Demand
Registration Right, the fees and disbursements of underwriters customarily paid
by issuers or sellers of securities (including the fees and expenses of any
"qualified independent underwriter" required by the NASD), the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, the reasonable fees and expenses of other Persons retained by
the Company in connection with such registration, and all other expenses
incurred by Stockholders customary for and incidental to the sale and delivery
of the shares of Common Stock to be sold by such Stockholders (but not including
any underwriting discounts or commission, if any, attributable to the sale of
Common Stock by holders of such Common Stock other than the Company).
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
ARTICLE 2
RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Stockholder agrees not to make any, direct or
indirect, offer to sell, contract to sell, transfer, assignment or other sale or
disposition of any of the Shares (each, a "DISPOSITION") of all or any portion
of the Shares unless and until:
(i) The Disposition complies with the
restrictions set forth in Section 2.1(b) hereof; and
(ii) There is then in effect a registration
statement under the Securities Act covering such proposed Disposition and such
Disposition is made in accordance with such registration statement; or
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(iii) (A) The transferee has agreed in writing
to be bound by the terms of this Agreement, (B) such Stockholder shall have
notified the Company of the proposed Disposition and shall have furnished the
Company with a reasonably detailed statement of the circumstances surrounding
the proposed Disposition, and (C) if reasonably requested by the Company, such
Stockholder shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, that such Disposition will not require
registration of such shares under the Securities Act.
(iv) Notwithstanding the provisions of paragraphs
(i), (ii) and (iii) above, no such compliance with restrictions on transfer
pursuant to Section 2.1(b) hereof shall apply and no registration statement or
opinion of counsel shall be necessary for a transfer by a Stockholder which is
(A) a partnership to its partners or former partners in accordance with
partnership interests, (B) a limited liability company to its members or former
members in accordance with their interest in the limited liability company, or
(C) to the Stockholder's family member or trust for the benefit of an individual
Stockholder; provided, however, that in each case the transferee will be subject
to the terms of this Agreement to the same extent as if such transferee were an
original Stockholder hereunder; and provided further, that in each case the
transfer is to persons acquiring at least 100,000 Shares (as adjusted for stock
splits, stock dividends and similar events).
(b) Each Stockholder agrees and consents (i) not to make a
Disposition of Shares and (ii) to the entry of stop-transfer instructions with
the Company's transfer agent against the transfer of Shares, except in
compliance with the following restrictions:
(1) During the period beginning on
the Closing Date and ending on the day that is the one year anniversary of the
Closing Date, no Stockholder will make any Disposition of Shares; and
(2) Beginning on the one year
anniversary of the Closing Date, each Stockholder may make a Disposition (or
Dispositions) of the greater of either (i) the maximum number of shares
permitted to be sold by such Stockholder under Rule 144 of the Securities Act or
(ii) during each of the first four calendar quarters (the "Second Year"), up to
such Stockholder's pro rata portion of the number of Shares representing fifteen
percent (15%) of the aggregate Shares issued to the Purchasers pursuant to the
Purchase Agreement (as adjusted for stock splits, stock dividends and similar
events) and in each of the two quarters following the Second Year, up to such
Stockholder's pro rata portion of the number of Shares representing twenty
percent (20%) of the aggregate Shares issued to the Purchasers pursuant to the
Purchase Agreement (as adjusted for stock splits, stock dividends and similar
events).
(c) Each certificate representing Shares shall (unless
otherwise permitted by the provisions of the Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR
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OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER, AS
SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION
AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.
SUCH TRANSFER RESTRICTIONS ARE BINDING ON THE
TRANSFEREES OF THESE SHARES.
(d) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(e) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities laws shall be removed upon receipt by the Company of an order
of the appropriate blue sky authority authorizing such removal.
2.2 PIGGYBACK REGISTRATION.
(a) Beginning on the one year anniversary of the Closing
Date, if the Company proposes (including in connection with any demand
registration by a Stockholder) to file any registration statement under the
Securities Act with respect to any Shares (other than pursuant to a registration
statement on Form S-4 or S-8 or any successor or similar forms in connection
with an exchange offer, corporate reorganization or other transaction under Rule
145 of the Securities Act or any successor rule, or any offering of securities
solely to the Company's then existing stockholders or employees of the Company
and its subsidiaries), the Company shall give written notice of such proposed
filing to each Stockholder at least thirty (30) days prior to such proposed
filing. Such notice shall offer to each Stockholder the opportunity to include
in such registration statement for resale by the Stockholders, such number of
shares of Common Stock each may request in a written notice to the Company
(which notice shall specify the number of shares to be disposed of by such
holder and the intended method of disposition thereof) within fifteen (15) days
after the receipt of such notice from the Company (a "PIGGYBACK REGISTRATION").
The Company shall permit, or shall cause the managing underwriter of any such
proposed offering to permit, the Shares requested to be included in the
registration to be included on the same terms and conditions as are applicable
to the other shares included in such registration statement. The Company or such
subsidiary, as applicable, shall not be required to maintain the effectiveness
of the registration statement beyond the earlier to occur of (i) 180 days after
the effective date of the registration statement; and (ii) consummation of the
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distribution by the Stockholders whose Shares are included in such registration
statement. If a Stockholder includes Shares in a Piggyback Registration with
respect to any registration of (i) shares by the Company or (ii) shares held by
one or more of the Company's other stockholders, such Piggyback Registration
shall not be deemed to be the exercise of a Demand Registration Right (as
defined below) by such Stockholder.
(b) If the registration statement under which the Company
gives notice under this Section 2.2 is for an underwritten offering, the Company
shall so advise the Stockholders. In such event, the right of any such
Stockholder to be included in a registration pursuant to this Section 2.2 shall
be conditioned on such Stockholder's participation in such underwriting and the
inclusion of such Stockholder's Shares in the underwriting to the extent
provided herein. All Stockholders proposing to distribute their Shares through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Agreement, if the
underwriter with respect to a registration pursuant to this Section 2.2
determines in good faith that marketing factors require a limitation of the
number of shares to be underwritten, then the Company shall so advise all
Stockholders participating in such registration and the number of shares that
may be included in the underwriting shall be allocated, first, to the Company;
second, to the Stockholders on a pro rata basis based on the total number of
Shares held by the Stockholders; and third, to any shareholder of the Company
(other than a Stockholder) on a pro rata basis. No such reduction shall reduce
the securities being offered by the Company for its own account to be included
in the registration and underwriting.
2.3 DEMAND REGISTRATION RIGHTS. Beginning on the one year anniversary
of the Closing Date, and subject to the conditions of this Section 2.3, if the
Company shall receive a written request from the Stockholders holding a majority
of the Shares then outstanding (the "INITIATING HOLDERS") that the Company file
a registration statement under the Securities Act covering the registration of
at least a majority of the Shares then held by the Stockholders (or a lesser
percent if the anticipated aggregate offering price would exceed $5,000,000),
the Company will include such shares in a registration statement on Form S-3 (or
any equivalent form), and use its best efforts to register such shares, under
the Securities Act (a "DEMAND REGISTRATION RIGHT"). The Stockholders shall have
two Demand Registration Rights with respect to the registration of shares on
Form S-3 at any time during which the Company is eligible to use Form S-3.
(a) The Company will promptly give written notice of such
requested registration to all other Stockholders and thereupon will use its best
efforts to effect the registration under the Securities Act of the Shares, which
the Company has been so requested to register, for disposition to the extent
required to permit the disposition by all such Stockholders of Shares to be
registered; provided, however, that the Company shall not be obligated to effect
any such registration pursuant to this Section 2.3 at any time prior to the date
six months following the consummation of any underwritten public offering by the
Company, and, provided further, that if (i) in the good faith judgment of the
Board of Directors of the Company, such registration would be seriously
detrimental to the Company, and the Board of Directors of the Company concludes,
as a result, that it is essential to defer the filing of such registration
statement at such time, and (ii) the Company shall furnish to the Initiating
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of
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Directors of the Company, it would be seriously detrimental to the Company for
such registration statement be filed in the near future and that it is,
therefore, essential to defer the filing of such registration statement, then
the Company shall have the right to defer such filing for a period of not more
than one hundred eighty (180) days after receipt of the request of the
Initiating Holder, and, provided further, that the Company shall not defer its
obligation in this manner more than once in any twelve-month period. If the
managing underwriter or underwriters, if any, advise the Stockholders seeking to
register shares of Common Stock, under this Section 2.3 in writing that in its
or their opinion the number of securities proposed to be sold in such
registration will materially adversely affect the success of such offering, the
Company will include in such registration the number of securities, if any,
which in the opinion of such underwriter or underwriters can be sold on a pro
rata basis based on the number of shares that each Stockholder holds.
2.4 HOLDBACK AGREEMENT. Notwithstanding any other provision in this
Article 2, each Stockholder whose shares of Common Stock are included in a
registration statement agrees it will not, and the Company shall use its best
efforts to not, permit any Affiliate to (and it shall be a condition to the
rights of each Stockholder under this Article 2 that such Stockholder does not)
offer for public sale any Shares, or effect any sale of Shares pursuant to Rule
144 of the Securities Act, for up to 180 days after the filing of the
registration statement of the Company under the Securities Act with respect to
any underwritten offering thereunder unless such shares are covered by such
registration statement or such shorter period is agreed to by any managing
underwriter or underwriters of such offering.
2.5 EXPENSES. All Registration Expenses, disbursements and fees
incurred by the Company and the Stockholders in connection with any registration
under this Article 2 shall be borne by the Company.
2.6 REGISTRATION PROCEDURES. In connection with the registration of
Shares under the Securities Act pursuant to this Agreement, the Company, will
furnish each Stockholder whose Shares are registered thereunder and each
underwriter, if any, with a copy of the registration statement (including all
exhibits thereto) and all amendments thereto and will supply each such
Stockholder and each underwriter, if any, with copies of any prospectus included
therein (including a preliminary prospectus and all amendments and supplements
thereto) in such quantities as may be reasonably necessary for the purposes of
the proposed sale or distribution covered by such registration.
In connection with the Company's registration obligations pursuant to
this Article 2, the Company will use its best efforts to effect such
registration to permit the sale of such Shares in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company will:
(a) prepare and file with the SEC, as soon as reasonably
practicable after receiving a written notice pursuant to Section 2.3, a
registration statement on Form S-3 (or any equivalent form) and shall be
available for the sale of the shares in accordance with the intended method or
methods of distribution thereof, and use its reasonable efforts to cause such
registration statement to become effective; provided that before filing a
registration statement or any prospectus related thereto or any amendments or
supplements thereto, including documents
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incorporated by reference after the initial filing of any registration
statement, the Company will furnish copies of all such documents proposed to be
filed to the holders of the shares covered by such registration statement and
underwriters, if any, and make the Company's representatives available for
discussion of such documents and other relevant matters and shall reasonably
consider such changes in such documents prior to the filing thereof as such
holders or underwriters may timely and reasonably request. If any Stockholder
whose Shares are covered by such registration statement shall reasonably object
to any disclosure in or omission from any registration statement or any
amendment thereto or any prospectus or any supplement thereto (including
documents incorporated by reference) which the Company in good faith on the
advice of counsel believes is necessary or appropriate to be included therein or
omitted therefrom, and prior to the effectiveness of such registration advises
the Company that it chooses not to participate in such offering, such
Stockholder may choose not to participate in such offering;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the registration statement as may be necessary to
keep such registration statement effective until all of the Shares offered
thereunder have been sold or the registration rights under this Article 2 have
otherwise terminated, whichever shall occur first; cause the related prospectus
to be supplemented by any required prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act; and comply with the
relevant provisions of the Securities Act during the applicable period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement or supplement to such prospectus;
(c) notify the selling Stockholders and the managing
underwriters if any, promptly and (if requested by any such holder) confirm such
advice in writing, (A) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to a registration
statement or any post-effective amendment, when the same has become effective,
(B) of any request by the SEC for amendments or supplements to a registration
statement or related prospectus or for additional information, (C) of the
issuance by the SEC of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(D) of the receipt by the Company of any written notification with respect to
the suspension of the qualification of any of the shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (E) (i) the existence of a material development or potential
material development with respect to or involving the Company which the Company
would be obligated to disclose in the prospectus or the registration statement
filed pursuant to Sections 2.2 or 2.3 hereof or any document incorporated or
deemed to be incorporated therein by reference, which disclosure would in the
good faith judgment of the Board of Directors of the Company be premature or
inadvisable at such time, or (ii) the occurrence of any event that makes any
statement made in the registration statement or prospectus included in the
registration statement filed pursuant to Sections 2.2 or 2.3 hereof 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 such
registration statement or prospectus so that it will not contain an untrue
statement of material fact required to be stated therein or necessary to make
the statements therein not misleading 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;
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(d) use reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement at the earliest
practicable moment;
(e) if reasonably requested by the managing underwriters or
a selling Stockholder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters or a
selling Stockholder agree should be included therein, subject to the last
sentence of Section 2.6(a); and promptly make all required filings of such
prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment;
(f) prior to any public offering of Shares, register or
qualify or cooperate with the selling Stockholders, the managing underwriters,
if any, and their respective counsel in connection with the registration or
qualification of such shares for offer and sale under the securities or "blue
sky" laws of such jurisdictions within the United States as any seller or
underwriter reasonably requests in writing and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such
jurisdictions of the shares of Common Stock covered by the applicable
registration statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to be so qualified or to take any action which would
subject itself to taxation (other than a nominal amount) in any such
jurisdiction or to general service of process in any jurisdiction where it is
not then so subject;
(g) cooperate with the selling Stockholders and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing shares of Common Stock to be sold and any
applicable restrictive legends; and enable such shares to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of shares to the
underwriters;
(h) use its best efforts to cause the shares covered by the
applicable registration statement to be listed or registered with or approved by
any stock exchange or quotation system on which the shares are then listed and
by such governmental agencies or authorities within the United States as may be
reasonably necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such shares;
(i) if any fact contemplated by Section 2.6(c)(E) shall
exist, prepare a supplement or post-effective amendment to the applicable
registration statement or the related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Shares being sold thereunder, such prospectus
will not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(j) in connection with any underwritten offering pursuant
to a registration statement filed pursuant to Section 2.3 hereof, MessageMedia
will enter into an underwriting agreement in the form reasonably necessary to
effect the offer and sale of Common Stock, provided such underwriting agreement
contains reasonable and customary provisions;
8.
<PAGE> 9
(k) make available for inspection during normal business
hours by a representative of each Stockholder, any underwriter participating in
any disposition pursuant to a registration statement, and any attorney or
accountants retained by such selling Stockholder or underwriter, all financial
and other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by such representative, underwriter, attorney
or accountant in connection with such registration statement; provided, that
such representative, underwriters, attorneys or accountants execute prior
thereto an agreement with the Company that all such records, information or
document shall be kept confidential by such persons unless (A) disclosure of
such records, information or documents is required by law or by court or
administrative order, or (B) such records, information or documents are or
become (but only when they become) generally available to the public other than
as a result of disclosure in violation of this paragraph.
The Company may require each Stockholder who is a party hereto as to
which any registration is being effected to furnish to the Company such
information and undertakings as it may reasonably request regarding such
Stockholder and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each Stockholder who is a party hereto agrees (i) that upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 2.6(c)(E) such Stockholder will forthwith discontinue such
Stockholder's disposition of Shares pursuant to the registration statement
relating to such shares until such Stockholder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.6(i) and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies then in such Stockholder's possession of the prospectus relating to
such shares current at the time of receipt of such notice and (ii) that such
Stockholder will immediately notify the Company, at any time when a prospectus
relating to the registration of such shares is required to be delivered under
the Securities Act, of the happening of any event as a result of which
information previously furnished by such holder to the Company in writing for
inclusion in such prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
2.7 INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION. (i) In the event of any registration
under the Securities Act of any Shares pursuant to this Article 2, the Company
hereby agrees to indemnify and hold harmless each Stockholder offering or
selling such shares and any underwriter, and their respective officers,
directors, stockholders, members, partners and affiliates, in connection with
such offer or sale against such losses, claims, damages, liabilities, costs or
expenses (including reimbursement for reasonable legal and other expenses) to
which any such person may become subject under the Securities Act or otherwise
insofar as such losses, claims, damages, liabilities, costs or expenses 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 shares
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any application or other filing under any "blue sky" or
state securities law, or any omission or alleged omission to
9.
<PAGE> 10
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, provided that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof), cost or expense arises out of or is based upon
an untrue statement or omission or alleged omission made in such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement, or application or other filing, (x) in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by such stockholder of the Company's securities or
underwriter or (y) which is corrected by the Company in an amendment sufficient
copies of which are provided to each Stockholder offering or selling such shares
and any underwriter if such amendment shall not have been sent or given by or on
behalf of such Stockholder or the underwriter to such person promptly after it
is so provided by the Company.
(ii) In the event of any registration under the Securities Act of any
shares of Common Stock pursuant to this Article 2, each Stockholder whose Shares
are included in such registration hereby agrees to indemnify and hold harmless,
but only for an amount, with respect to such Stockholder, not in excess of the
net proceeds realized by such Stockholder from the sale of its shares of Common
Stock registered pursuant to such registration statement, both the Company and
its officers, directors, stockholders and affiliates, and any underwriter, and
their respective officers, directors, stockholders and affiliates, in connection
with such offer or sale against such losses, claims, damages, liabilities, costs
or expenses (including reimbursement for reasonable legal and other expenses) to
which any such person may become subject under the Securities Act or otherwise
insofar as such losses, claims, damages, liabilities, costs or expenses arise
out of or are based solely upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
shares were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any application or other filing under any "blue sky" or
state securities law, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, to the extent that such untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement, or application or
other filing, is contained in any written information furnished to the Company
through an instrument duly executed by such holder.
(b) CONTRIBUTION. (i) If the indemnification provided for
in Section 2.7(a) is unavailable to persons to be indemnified pursuant thereto
in respect of any losses, claims, damages, liabilities, costs or expenses
referred to therein, then the Company, in lieu of indemnifying such person,
shall contribute to the amount paid or payable by such person as a result of
such losses, claims, damages, liabilities, costs or expenses, in such proportion
as is appropriate to reflect the relative fault of the Company and such persons
in connection with the actions which resulted in such losses, claims, damages,
liabilities, costs or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company and such persons shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, the Company or such persons, and the parties' relative
intent, knowledge, access to information and
10.
<PAGE> 11
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities, costs and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 2.7(b) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 2.7(b), an indemnified person
shall not be required to contribute any amounts in excess of the amount by which
the total price at which the Shares were sold by such indemnified person and
distributed to the public exceeds the amount of any damages which such
indemnified person has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission and provided,
however, that such Stockholder's aggregate liability shall be limited to the net
proceeds realized by such Stockholder in such offering. Notwithstanding any
provision at law to the contrary, 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.
(iii) If indemnification is available under this Article 2, the
Company shall indemnify each indemnified party to the full extent provided
herein without regard to the relative fault of the Company or the indemnified
party or any other equitable consideration provided for in this Section 2.7(b).
(iv) In the event that any provisions of an indemnification clause in
an underwriting agreement executed by or on behalf of a Stockholder differs from
a provision in this Article 2, such provision in the underwriting agreement
shall determine such holder's rights in respect thereof.
2.8 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register the Shares pursuant to this Article 2 may be assigned by a
Stockholder to a transferee or assignee of Shares which (a) is a subsidiary,
parent, general partner, limited partner, retired partner, member or retired
member of the Stockholder, or (b) is the Stockholder's family member or trust
for the benefit of such Stockholder; provided, however, that the rights set
forth in Article 2 hereof shall be transferable only to persons acquiring at
least 100,000 Shares (as adjusted for stock splits, stock dividends and similar
events); and, provided further, (i) the transferor shall, within ten (10) days
after such transfer, furnish to the Company written notice of the name and
address of such transferee or assignee and the securities with respect to which
such registration rights are being assigned and (ii) such transferee shall agree
in writing to be subject to all restrictions set forth in this Agreement.
2.9 TERMINATION OF REGISTRATION RIGHTS. All registration rights under
this Article 2 shall terminate and be of no further force and effect with
respect to each Stockholder when the Shares held by such Stockholder (and its
affiliates, partners, former partners, members and former members) may be sold
under Rule 144 of the Securities Act during any ninety (90) day period.
11.
<PAGE> 12
ARTICLE 3
CERTAIN REPRESENTATIONS AND COVENANTS
3.1 STOCKHOLDER REPRESENTATION. Each Stockholder represents and
warrants as to itself that as of the Closing Date (after giving effect to all
transactions occurring on or as of the Closing Date) such Stockholder is (i)
authorized to enter into this Agreement, (ii) has duly executed and delivered
this Agreement and (iii) is not a party with any other Person to any other
agreement with respect to the holding, voting, acquisition or disposition of
Shares.
ARTICLE 4
MISCELLANEOUS
4.1 INJUNCTIVE RELIEF. It is acknowledged that it will be impossible
to measure in money the damages that would be suffered if the parties fail to
comply with certain of the obligations imposed on them by this Agreement,
including without limitation those obligations set forth in Article 2 and that
in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall,
therefore, be entitled to injunctive relief and/or specific performance to
enforce such obligations, and if any action should be brought in equity to
enforce any of such provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
4.2 FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
4.3 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California.
4.4 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement (i) contains
the entire agreement among the parties hereto with respect to the subject matter
hereof, (ii) supersedes all prior written agreements and negotiations and oral
understandings, if any, with respect thereto, (iii) may not be amended,
supplemented or waived except by an instrument or counterparts thereof in
writing signed by the Company and a majority in interest of the Stockholders
then holding Shares.
4.5 BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties hereto and, subject to the terms and provisions
hereof, their respective legal representatives, successors and permitted
assigns.
4.6 INVALIDITY OF PROVISION. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
12.
<PAGE> 13
4.7 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, all of which taken together shall be deemed but one
and the same instrument.
4.8 NOTICES. All notices and communications provided for or given or
made hereunder shall be in writing (including delivery by facsimile
transmission) and, unless otherwise provided herein, shall be deemed to have
been given when received by the party to whom such notice is to be given at its
address set forth in the Purchase Agreement, or such other address for the party
as shall be specified by notice given pursuant hereto.
4.9 HEADINGS. The descriptive headings of the several paragraphs of
this Agreement are inserted for convenience only and do not constitute part of
this Agreement.
4.10 TERMINATION OF AGREEMENT. This Agreement shall terminate and be
of no further force and effect upon the Stockholders holding less than ten
percent (10%) of the total number of shares of Common Stock issued to the
Stockholders pursuant to the Purchase Agreement (as adjusted for stock splits,
stock dividends and similar events).
[THIS SPACE INTENTIONALLY LEFT BLANK]
13.
<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf
of each of the parties hereto as of the date first above written.
MESSAGEMEDIA, INC.
By: /s/ Bert C. Klein
-------------------------------------
Name: Bert C. Klein
Title: Vice President of Finance
and Administration
and Chief Financial Officer
STOCKHOLDERS:
PEQUOT PRIVATE EQUITY FUND, L.P.
BY: PEQUOT CAPITAL MANAGEMENT, INC.,
its investment manager
By: /s/ Amiel Peretz
--------------------------------
Name: Amiel Peretz
Title: C.O.O.
PEQUOT OFFSHORE PRIVATE EQUITY FUND, INC.
BY: PEQUOT CAPITAL MANAGEMENT, INC.,
its investment manager
By: /s/ Amiel Peretz
----------------------------------
Name: Amiel Peretz
Title: C.O.O.
<PAGE> 15
SCHEDULE I
STOCKHOLDERS' OWNERSHIP OF SECURITIES OF THE COMPANY
COMMON STOCK
PEQUOT PRIVATE EQUITY FUND, L.P. 2,088,513 shares
PEQUOT OFFSHORE PRIVATE EQUITY FUND, INC. 264,429 shares
