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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
September 15, 2000, by and among REGISTER.COM, INC., a Delaware corporation (the
"Company"), and the Persons listed on the signature page hereto (the
"Stockholders").
PREAMBLE
WHEREAS, in order to induce the Stockholders, Afternic.com,
Inc. ("Afternic") and eXtraActive Incorporated ("EAI") to enter into the
Agreement and Plan of Merger and Reorganization, dated as of the date hereof, by
and among the Company, RCOM Acquisition Corp. II, Afternic, EAI and the
stockholders of Afternic identified on Schedule 1 thereto (the "Reorganization
Agreement"), the Company has agreed to provide the registration rights set forth
in this Agreement; and
WHEREAS, the execution and delivery of this Agreement by the
Company is a condition to consummating the Merger (as defined in the
Reorganization Agreement) pursuant to the Reorganization Agreement.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Stockholders agree as follows:
1. Definitions. As used in this Agreement, the following capitalized terms
shall have the following meanings:
Common Stock: Common Stock of the Company, par value $ 0.0001
per share, as constituted on the date hereof, and any capital stock into which
such Common Stock may hereafter be changed, and such term shall also include
(unless the context clearly indicates otherwise) (i) capital stock of the
Company of any other class or series (regardless of how denominated) issued to
the holders of shares of Common Stock upon any reclassification thereof which is
also not preferred as to dividends or assets on liquidation over any other class
or series of capital stock of the Company and which is not subject to redemption
and (ii) shares of common stock of any successor or acquiring corporation or any
affiliate thereof which are issued or may be issuable to any Stockholders in the
circumstances contemplated by Section 13(k).
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the SEC.
Family Donee: With respect to individual Stockholders, (i)
such Stockholder's parents, spouse, adult lineal descendants and siblings, (ii)
the adult spouses of such siblings, the adult spouses of such lineal descendants
and the parents of such spouse, and (iii) trusts for the benefit of any of such
individuals or their children.
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Indemnified Holder: See Section 8(a) hereof.
Initiating Holders: See Section 5 hereof.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation,
limited liability company, joint venture, trust or unincorporated organization,
or a government or agency or political subdivision thereof of whatever nature.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments to the
Registration Statement of which such prospectus is a part and all material
incorporated by reference in such prospectus.
Registration Expenses: See Section 7(b) hereof.
Registrable Securities: Any and all shares of Common
Stock which (i) are issued to the Stockholders by the Company pursuant to the
Reorganization Agreement, or (ii) are issued or issuable pursuant to a stock
dividend, stock split or other distribution with respect to such shares of
Common Stock, or issued to any of the Stockholders in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided, however, that any Registrable Security shall cease to
be a Registrable Security if (a) a registration statement under the Securities
Act covering such Registrable Security shall have been declared effective by the
Commission and such Registrable Security shall have been disposed of pursuant to
such registration statement, (b) such Registrable Security shall have been sold
in a transaction which satisfies the requirements of paragraph (f) of Rule 144
under the Securities Act (as such paragraph is in effect on the issue date) and,
if such transaction is a "brokers' transaction" referred to in such paragraph of
Rule 144, also satisfies the requirements of paragraph (g) of Rule 144 under the
Securities Act (as such paragraph is in effect on the Issue Date), or (c) such
Registrable Security is no longer held by a Stockholder.
Registration Statement: Any registration statement of
the Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
Rights: Any options, warrants, convertible or
exchangeable securities or other rights, however denominated, to subscribe for,
purchase or otherwise acquire any equity interest or other security of any class
or series, with or without payment of additional consideration in cash or
property, either immediately or upon the occurrence of a specified date or a
specified event or the satisfaction or happening of any other condition or
contingency.
Securities Act: The Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder by the SEC.
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SEC: The Securities and Exchange Commission.
Stockholder: Each Person who is a party hereto and each
Family Donee of such Person who (i) at any time acquires any Registrable
Securities directly or indirectly from such Stockholder in a transaction or
chain of transactions not involving a public offering within the meaning of the
Securities Act and (ii) was assigned, by such Person from whom such Registrable
Securities were acquired, the registration rights of such Stockholder hereunder
with respect to such Registrable Securities, together with the successors and
assigns, heirs and personal representatives of each of the foregoing, in each
case for so long as any such Stockholder continues to hold Registrable
Securities; provided, however, that no such other Person shall constitute a
Stockholder unless each Person to whom any such transfer is made shall,
contemporaneously with such transfer and by written instrument signed by such
Person and the Company, become a party to, and a "Stockholder" under, and accept
and adopt the terms and provisions of, this Agreement.
2. Securities Subject to this Agreement. The securities entitled to the
benefits of this Agreement are the Registrable Securities.
3. Holders of Registrable Securities. A Person is deemed to be a holder
of Registrable Securities whenever such Person owns of record Registrable
Securities or has the Right to acquire such Registrable Securities, whether or
not such acquisition has actually been effected and disregarding any legal
restrictions upon the exercise of such right.
4. Piggy-Back Registration. If the Company at any time or from time to
time subsequent to the date of this Agreement proposes to register any
securities under the Securities Act either for its own account or the account of
any selling security holders (other than pursuant to (i) a registration
statement on Forms S-4 or S-8 or any successor or similar forms, (ii) a
registration relating solely to an offering pursuant to Rule 145 under the
Securities Act (a "Rule 145 transaction"), or (iii) a registration on any form
that does not permit secondary sales), the Company shall:
(a) give to each holder of a Registrable Security written notice
thereof at least ten (10) days in advance of the filing of any registration
statement in respect thereof (which notice will 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, the proposed
offering price, and the plan of distribution);
(b) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, subject to Section 4(b), all the Registrable Securities specified in a
written request or requests, made within ten (10) days after receipt of such
written notice from the Company, by any holder or holders of Registrable
Securities;
(c) use commercially reasonable efforts to cause the managing
underwriter or underwriters of such proposed underwritten offering to permit the
Registrable Securities requested to be included in the Registration Statement
for such offering to be included on the same terms and conditions as any similar
securities of the Company included therein. Notwithstanding the foregoing, if
the managing underwriter or underwriters of such offering determine that
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marketing considerations require a limitation on the number of shares of Common
Stock or other Registrable Securities offered pursuant to any Registration
Statement subject to this Section, then subject to the advice of said managing
underwriter or underwriters as to the size and composition of the offering, the
Company will include Common Stock and other Registrable Securities in such
registration in accordance with the following priorities: (i) first, if such
offering is a secondary offering on behalf of the holders of securities of the
Company pursuant to a contractual obligation of the Company to register such
securities (i.e., a demand registration right), the securities to be sold for
the account of the holders initiating the demand; (ii) second, securities to be
sold for the account of the Company; (iii) third, securities to be sold for the
account of holders of securities of the Company pursuant to piggy-back
registration provisions of other agreements in existence on the date hereof, and
(iv) fourth, with respect to all holders of Registrable Securities and all
holders of other Common Stock who have requested to be included in the
registration pursuant to this Section 4 and to other, analogous piggy-back
registration provisions of other agreements, respectively, in proportion to the
number of shares each such holder requested to be included in the offering
pursuant to their respective piggy-back rights. The Company will bear all
Registration Expenses in connection with a piggy-back registration.
(d) Notwithstanding the foregoing, if at any time after giving
written notice of its intention to register its equity securities and before the
effectiveness of the Registration Statement filed in connection with such
registration, the Company determines for any reason either not to effect such
registration or to delay such registration, the Company may, at its election, by
delivery of written notice to each holder of Registrable Securities (A) in the
case of a determination not to effect registration, relieve itself of its
obligation to register the Registrable Securities in connection with such
registration or (B) in the case of a determination to delay registration, delay
the registration of such Registrable Securities for the same period as the delay
in the registration of such other equity securities.
5. Registration on Form S-3.
(a) In case the Company shall receive a written request from
holders who in the aggregate hold at least fifty percent (50%) of the
Registrable Securities (collectively, the "Initiating Holders") that the Company
file a registration statement on Form S-3 (or any successor form to Form S-3)
for a public offering of shares of the Registrable Securities the aggregate
price to the public of which, net of underwriting discounts and commissions,
would exceed $1,000,000 and the Company is a registrant entitled to use Form S-3
to register the Registrable Securities for such an offering, the Company shall
use its commercially reasonable efforts to cause such Registrable Securities to
be registered for the offering on such form and to cause such Registrable
Securities to be qualified in such jurisdictions as such holder or holders may
reasonably request. If such offer is to be an underwritten offer, the
underwriters selected by the Initiating Holders must be reasonably acceptable to
the Company. The Company shall not be required to effect more than two (2)
registrations pursuant to this Section 5. Any such registration must be
maintained in effect until the earlier of (i) the expiration of one hundred
eighty (180) days or (ii) the date the shares under registration on Form S-3 are
sold. Notwithstanding the foregoing, the Company shall not be required to effect
more than one (1) registration pursuant to this Section 5 during any twelve (12)
month period. The Company shall inform the other holders of Registrable
Securities of the proposed registration and offer them upon at least ten (10)
days' written notice the opportunity to participate. In the event the
registration is proposed to be part of a firm commitment underwritten public
offering, the cut-back provisions of Section 4(c) shall be applicable to the
registration initiated under this Section 5.
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(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 5:
(1) If the Company, within ten (10) days of the receipt of
the request of the Initiating Holders, gives notice of its bona fide intention
to effect the filing of a registration statement with the SEC within ninety (90)
days of receipt of such request (other than with respect to a registration
statement relating to a Rule 145 transaction, an offering solely to employees or
any other registration which is not appropriate for the registration of
Registrable Securities);
(2) During the period starting with the date sixty (60) days
prior to the Company's estimated date of filing of, and ending on the date six
(6) months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective; or
(3) If 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 Directors, it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed in the
near future, then the Company's obligation to use its commercially reasonable
efforts to file a registration statement shall be deferred for a period not to
exceed one hundred eighty (180) days from the receipt of the request to file
such registration by such Initiating Holders, provided that the Company may not
exercise this deferral right more than once per twelve (12) month period.
6. Registration Procedures. In connection with the Company's
registration obligations pursuant to Sections 4 and 5 hereof, the Company will
use commercially reasonable efforts to effect such registration to permit the
sale of such Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company will:
(a) before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such Registration
Statement and the underwriters, if any, copies of all such documents proposed to
be filed, which documents will be made available for prior review and comment by
such counsel;
(b) prepare and file with the SEC a Registration Statement and
such amendments and post-effective amendments to any Registration Statement, and
such supplements to the Prospectus, as may be required by the rules, regulations
or instructions applicable to the registration form utilized by the Company or
by the Securities Act or otherwise necessary to keep such Registration Statement
continuously effective; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
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(c) notify the selling holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing,
(1) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(2) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation or threatening
of any proceedings for that purpose,
(3) if at any time the representations and warranties of the
Company contemplated by paragraph (n) below cease to be true and correct,
(4) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, and
(5) of the existence of any fact which results in the
Registration Statement, the Prospectus or any document incorporated therein by
reference containing an untrue statement of material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
(d) use reasonable efforts to prevent the issuance of any stop
order or to obtain the withdrawal of any order suspending the effectiveness of
the Registration Statement as soon as practicable;
(e) if reasonably requested by the managing underwriter or
underwriters or a holder of Registrable Securities being sold in connection with
an underwritten offering, immediately incorporate in a Prospectus supplement or
post-effective amendment such necessary information as the managing underwriters
or the holders of a majority in number of the Registrable Securities being sold
reasonably request to have included therein relating to the plan of distribution
with respect to such Registrable Securities, including, without limitation,
information with respect to the amount of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment;
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(f) at the request of any selling holder of Registrable
Securities, furnish to such selling holder of Registrable Securities and each
managing underwriter, without charge, at least one copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(g) deliver to each selling holder of Registrable Securities and
the underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the selling holders
of Registrable Securities and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, use
commercially reasonable efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions 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 Registrable
Securities covered by the Registration Statement; provided that the Company will
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to general
service of process or taxation in any such jurisdiction where it is not then so
subject;
(i) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriters may
request at least two (2) business days prior to any sale of Registrable
Securities to the underwriters;
(j) use commercially reasonable efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other United States federal or state governmental
agencies or authorities as may be necessary to enable the seller or sellers
thereof and the underwriters, if any, to consummate the disposition of such
Registrable Securities;
(k) if any fact contemplated by paragraph (c)(5) above shall
exist, prepare a supplement or post-effective amendment to the 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 Registrable Securities, the Prospectus will not contain
an untrue statement of a material fact or omit 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;
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(l) use commercially reasonable efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on each securities
exchange or automated quotation system on which similar securities issued by the
Company are then listed;
(m) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable Securities
and provide the applicable trustee(s) or transfer agent(s) with printed
certificates for the Registrable Securities which are in a form eligible for
deposit with The Depositary Trust Company;
(n) enter into customary agreements (including underwriting
agreements) and take all other appropriate actions in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration:
(1) make such representations and warranties and indemnities
to the holders of such Registrable Securities and the underwriters, if any, in
form, scope and substance as are customarily made by issuers to underwriters in
primary underwritten offerings;
(2) obtain "cold comfort" letters and updates thereof from
the Company's independent certified public accountants, as requested, addressed
to the selling holders of Registrable Securities and the underwriters, if any,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters in connection with
primary underwritten offerings (provided that the Registrable Securities
constitute at least ten percent (10%) of the securities covered by such
Registration Statement);
(3) deliver such documents and certificates as may be
reasonably requested by the holders of a majority of the Registrable Securities
being sold and the managing underwriters, if any, to evidence compliance with
paragraph (k) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
(o) otherwise use commercially reasonable efforts to comply with
all applicable rules and regulations of the SEC, and make generally available to
its security holders earnings statements satisfying the provisions of Section
11(a) of the Securities Act, no later than forty-five (45) days after the end of
any twelve (12) month period (or ninety (90) days, if such a period is a fiscal
year) (1) commencing at the end of any month in which Registrable Securities are
sold to underwriters in an underwritten offering, or, if not sold to
underwriters in such an offering, (2) beginning with the first month commencing
after the effective date of the Registration Statement, which statements shall
cover said twelve (12) month periods;
(p) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD); and
(q) promptly prior to the filing of any document which is to be
incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the Registration Statement) provide copies of such
document for review and comment to counsel to the selling holders of Registrable
Securities, if requested, and to the managing underwriters, if any, and make the
Company's representatives available for discussion of such document.
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The Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees that to avail itself
of the rights afforded hereby, upon receipt of any notice from the Company of
the happening of any event of the kind described in paragraph (k) above, such
holder will forthwith discontinue disposition of Registrable Securities
registered in a Registration Statement until such holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by paragraph (k) above,
or until it is advised in writing by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings which are incorporated by reference in the Prospectus, and, if so
directed by the Company, such holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
Each holder of Registrable Securities agrees that to avail itself
of the rights afforded hereby, such holder shall (i) make such representations
and warranties and indemnities to the Company and the underwriters in form,
scope and substance as are customarily made by selling shareholders in primary
underwritten offerings; (ii) obtain opinions of counsel to such holder and
updates thereof (provided that such opinions shall be at the sole expense of the
Company) and addressed to the Company and the underwriter covering the matters
customarily covered in opinions requested in underwritten offerings; and (iii)
deliver such documents and certificates as may be reasonably requested by the
Company and the managing underwriters to ensure the Company's compliance with
Section 6(k) above.
7. Registration Expenses; Hold-back Agreements.
(a) Subject to Section 7(d), all expenses incident to the
Company's performance of or compliance with this Agreement will be paid by the
Company, regardless whether a Registration Statement becomes effective,
including, without limitation:
(1) all registration and filing fees (including, without
limitation, with respect to filings required to be made with the NASD);
(2) fees and expenses of compliance with securities or blue
sky laws (including, without limitation, fees and disbursements of counsel for
the underwriters or selling holders in connection with blue sky qualifications
of the Registrable Securities and determination of their eligibility for
investment under the laws of such jurisdictions, as the managing underwriters or
holders of Registrable Securities being sold may designate);
(3) printing (including, without limitation, expenses of
printing or engraving certificates for the Registrable Securities in a form
eligible for deposit with The Depositary Trust Company and of printing
prospectuses), messenger, telephone and delivery expenses;
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(4) fees and disbursements of counsel for the Company and for
the selling holders of the Registrable Securities (subject to the provisions of
Section 7(b) hereof);
(5) fees and disbursements of all independent certified
public accountants of the Company (including, without limitation, the expenses
of "cold comfort" letters required by or incident to such performance);
(6) securities acts liability insurance if the Company so
desires; and
(7) fees and expenses associated with any NASD filing
required to be made in connection with the Registration Statement, including, if
applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained in accordance with the rules
and regulations of the NASD (all such expenses being herein called "Registration
Expenses"). Notwithstanding the foregoing, the Company shall not be responsible
for the payment of any discounts, commissions or fees of underwriters, selling
brokers, dealer managers or similar securities industry professionals relating
to the distribution of the Registrable Securities.
The Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the securities to
be registered on each securities exchange on which similar securities issued by
the Company are then listed, rating agency fees and the fees and expenses of any
Person, including special experts, retained by the Company.
(b) Except as provided below, in connection with each Registration
Statement required hereunder, the Company will reimburse the holders of
Registrable Securities being registered pursuant to such Registration Statement
for the reasonable fees and disbursements of not more than one counsel chosen by
the holders of a majority of such Registrable Securities being registered
pursuant to such Registration Statement; provided that such counsel is
reasonably acceptable to the Company.
(c) Each holder of Registrable Securities agrees not to effect any
public sale or distribution of securities of the Company of the same class as
the securities included in a Registration Statement, including a sale pursuant
to Rule 144 under the Securities Act, during the seven (7) day period prior to,
and during the period (up to one hundred eighty (180) days) following, the
effective date of such Registration Statement for each underwritten offering
made pursuant to such Registration Statement, to the extent requested in writing
by the managing underwriters (except as part of such underwritten registration,
if permitted); provided, however, that the hold-back period shall not be longer
than the hold-back period agreed to in writing by the Company's executive
officers and directors.
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(d) Notwithstanding the foregoing, in connection with the second
Registration Statement subject to a demand registration effected under Section
5(a) by holders of Registrable Securities, the holders of Registrable Securities
including shares in such Registration Statement shall be required to contribute
an aggregate of $100,000 on a pro rata basis toward the Registration Expenses
incurred in connection with effecting such Registration Statement.
8. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each holder of Registrable Securities, and, if
applicable, its officers, directors, employees and agents and each Person who
controls such holder within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes
hereinafter referred to as an "Indemnified Holder") from and against all losses,
claims, damages and liabilities, including all actual legal or other expenses
reasonably incurred by an Indemnified Holder in connection with investigating or
defending against such loss, claim, damage, liability or action, joint or
several, to which such Indemnified Holders may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon 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, except insofar as any
such untrue statement or omission is based upon information furnished in writing
to the Company by such holder expressly for use therein; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if the Prospectus would have completely
corrected such untrue statement or omission; and provided further, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus, if such untrue statement or alleged untrue statement, omission or
alleged omission is completely corrected in an amendment or supplement to the
Prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such holder
thereafter fails to deliver such Prospectus as so amended or supplemented prior
to or concurrently with the sale of a Registrable Security to the person
asserting such loss, claim, damage, liability or expense who purchased such
Registrable Security which is the subject thereof from such holder. This
indemnity will be in addition to any liability which the Company may otherwise
have. The Company will also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls such
Persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Indemnified Holders of Registrable Securities.
If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an Indemnified
Holder in respect of which indemnity may be sought from the Company, such
Indemnified Holder shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Holder and the payment of all expenses. Such
Indemnified Holder shall have the right to employ separate counsel in any such
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action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be the expense of such Indemnified Holder unless (a) the
Company has agreed to pay such fees and expenses or (b) the Company shall have
failed to assume the defense of such action or proceeding or shall have failed
to employ counsel reasonably satisfactory to such Indemnified Holder in any such
action or proceeding or (c) such Indemnified Holder in its reasonable judgment
has separate defenses available or due to actual or potential material differing
interests between them (in which case, if such Indemnified Holder notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, the Company shall not have the right to assume the defense of such
action or proceeding on behalf of such Indemnified Holder, it being understood,
however, that the Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for such Indemnified Holder and any
other Indemnified Holders, which firm shall be designated in writing by such
Indemnified Holders). The Company shall not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such action or proceeding, the Company agrees to indemnify and hold harmless
such Indemnified Holders from and against any loss or liability by reason of
such settlement or judgment.
(b) Indemnification by Holder of Registrable Securities. Each
holder of Registrable Securities severally agrees to indemnify and hold harmless
the Company, its directors, officers, employees and agents and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each other holder of
Registrable Securities that participates in such offering to the same extent as
the foregoing indemnity from the Company to such holder, but only with respect
to information relating to such holder furnished in writing by such holder
expressly for use in any Registration Statement or Prospectus, or any amendment
or supplement thereto, or any preliminary prospectus. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person, in respect of which indemnity may be sought against
a holder of Registrable Securities, such holder shall have the rights and duties
given the Company and the Company or its directors or officers or such
controlling person shall have the rights and duties given to each holder by the
preceding paragraph. Notwithstanding the foregoing, if the Company is an
indemnified party, the Company shall designate the one counsel, and in all other
circumstances, the one counsel shall be designated by a majority in interest
based upon the Registrable Securities of the Indemnified parties. In no event
shall the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
The Company and each other holder of Registrable Securities that
participates in such offering shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above with respect to information so furnished in writing by such Persons
specifically for inclusion in any Prospectus or Registration Statement or any
amendment or supplement thereto, or any preliminary prospectus.
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(c) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under Section 8(a) or Section
8(b) hereof (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Company, on the one hand, and of the Indemnified Holder, on the other hand,
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Indemnified Holder and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each holder of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 8(c)
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
8(c), an Indemnified Holder shall not be required to contribute any amount in
excess of the amount by which the total price at which the securities sold by
such Indemnified Holder or its affiliated Indemnified Holders and distributed to
the public were offered to the public exceeds the amount of any damages which
such Indemnified Holder, or its affiliated Indemnified Holders, has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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.
9. Rule 144. Upon the request of any holder of Registrable Securities,
the Company will deliver to such holder a written statement as to whether it has
complied with those requirements under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder, the compliance with
which are necessary to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time or (b) any similar rule or regulation hereafter adopted by the
SEC.
10. Participation in Underwritten Registrations.
(a) No holder (or its successors or assigns) may participate in
any underwritten registration hereunder unless such Person (a) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved by the underwriters and other Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
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(b) In the case of an underwritten offering by the Company of
securities, each holder of Registrable Securities shall, with respect to
Registrable Securities that such holder then desires to sell pursuant to
Sections 4 or 5, enter into an underwriting agreement with the same underwriters
engaged by the Company with respect to securities being offered by the Company
and the Company shall cause such underwriters to include in any such
underwriting all of the securities that a holder of Registrable Securities then
desires to sell; provided, however, that such underwriting agreement is in
substantially the same form as the underwriting agreement that the Company
enters into in connection with the primary offering it is making, except for
such differences in the underwriting agreement as are generally customary to
distinguish between an issuer and its selling stockholders.
11. Restrictive Legend. Each certificate representing Registrable
Securities shall, except as otherwise provided in this Section 11 or in Section
12, be stamped or otherwise imprinted with a legend substantially in the
following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or applicable state
securities laws. These securities have been acquired for investment and
not with a view to distribution or resale, and may not be sold
mortgaged, pledged, hypothecated or otherwise transferred without an
effective registration statement for such securities under the
Securities Act of 1933 and applicable state securities laws, or the
availability of an exemption from the registration provisions of the
Securities Act of 1933 and applicable state securities laws."
A certificate shall not bear such legend if in the opinion of counsel reasonably
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Securities Act.
12. Notice of Proposed Transfer. Prior to any proposed transfer of any
Registrable Securities (other than under the circumstances described in Sections
4 and 5), the holder thereof shall give written notice to the Company of its
intention to effect such transfer. Each such notice shall describe the manner of
the proposed transfer and, if requested by the Company, shall be accompanied by
an opinion of counsel reasonably satisfactory to the Company to the effect that
the proposed transfer may be effected without registration under the Securities
Act, whereupon the holder of such stock shall be entitled to transfer such stock
in accordance with the terms of its notice; provided, however, that no such
opinion of counsel shall be required for a transfer to one or more partners of
the transferor (in the case of a transferor that is a partnership), to one or
more members of the transferor (in the case of a transferor that is a limited
liability company) or to an affiliated corporation (in the case of a transferor
that is a corporation); provided, further, however, that any transferee other
than a partner or affiliate of the transferor shall execute and deliver to the
Company a representation letter in form reasonably satisfactory to the Company's
counsel to the effect that the transferee is acquiring Registrable Securities
for its own account, for investment purposes and without any view to
distribution thereof. Each certificate for Registrable Securities transferred as
above provided shall bear the legend set forth in Section 11, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act. The restrictions provided for in this Section 12 shall not apply
to securities which are not required to bear the legend prescribed by Section 11
in accordance with the provisions of that Section.
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13. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Registrable Securities; provided,
further, that no such amendment shall unfairly discriminate against any
particular holder of Registrable Securities relative to the other holders
thereof. Any action taken under this Section shall bind all holders of
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the Registrable Securities being sold.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a holder of Registrable Securities initially at its
address set forth on Exhibit A attached hereto and thereafter at such other
address, notice of which is given by such holder to the Company in accordance
with the provisions of this Section 13(c); and
(2) if to the Company, initially at its address set forth on
Exhibit A attached hereto and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 13(b), with a copy to
Brobeck, Phleger & Harrison LLP, 1633 Broadway, New York, New York 10019,
attention: Scott L. Kaufman, Esq.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered during
regular business hours on a business day (otherwise, on the next business day);
when received if deposited in the mail, postage prepaid, if mailed; when receipt
of confirmation of delivery occurs, if telecopied during regular business hours
on a business day (otherwise, on the next business day); and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
(c) Termination of Registration Rights. The rights granted
pursuant to Sections 4 and 5 of this Agreement shall terminate as to any holder
of Registrable Securities upon the earlier of (i) the date three years after the
date of this Agreement and (ii) such time as the holder may sell all of its
Registrable Securities in any single three (3) month period under Rule 144.
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(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Company, and
the heirs, personal representatives and permitted assigns of the Stockholders
who are natural persons and the successors and permitted assigns of the
Stockholders who are not natural persons.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
(h) Severability. 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.
(i) Entire Agreement. This Agreement, including any exhibits
hereto and the documents and instruments referred to herein and therein, is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties, covenants or undertakings, other than those
set forth or referred to herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
(j) Certain Mergers and Other Events. If the Company proposes to
consummate any consolidation, merger, binding share exchange or reorganization
to which the Company is a party and in which the Company is not the continuing
corporation or any sale, conveyance, transfer or lease to another entity of the
properties and assets of the Company as an entirety or substantially as an
entirety and if, as a result of or in connection with such transaction, the
Stockholders would receive or would be entitled to receive, in exchange for or
otherwise with respect to the Registrable Securities held by them, any common
stock, other capital stock or other securities of the successor or acquiring
corporation or any affiliate thereof or any Rights for any such common stock,
capital stock or other securities, then the Company shall not consummate such
transaction unless the successor or acquiring entity (as the case may be) shall,
in a manner reasonably satisfactory to the holders of a majority of the
Registrable Securities, grant to the Stockholders registration rights with
respect to such common stock, other capital stock or other securities which
shall be no less favorable in all material respects to the Stockholders than the
provisions of this Agreement. In the event of (i) any reclassification,
reorganization or change of the outstanding shares of Common Stock or other
capital stock of the Company, (ii) any consolidation, merger, binding share
exchange or reorganization to which the Company is party (other than a
consolidation, merger, share exchange or reorganization in which the Company is
the continuing corporation and which does not result in any reclassification of
or change in the Common Stock) or (iii) any other event of any kind occurs which
results in a change in the securities constituting or included in the Common
Stock immediately before such event, then the Stockholders shall be entitled to
registration rights with respect to all such securities issued or issuable to
them by reason thereof which are comparable in all material respects to those
provided for herein with respect to Registrable Securities. In the event any
dispute relating to this Section 13(j) shall arise, then such dispute shall
promptly thereafter be submitted for resolution by an independent law firm of
recognized national standing selected by the Company and reasonably acceptable
to the holders of a majority of the Registrable Securities, whose decision (with
the advice of an independent investment banking firm of recognized national
standing selected by such law firm, if such law firm believes it advisable to
seek such advice) shall be final and conclusive. The fees and expenses of such
law firm (and of any such investment banking firm) shall be paid by the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
REGISTER.COM, INC., a Delaware corporation
By: /s/ Jack S. Levy
------------------------------------------
Name: Jack S. Levy
STOCKHOLDERS:
By: /s/ Jon Whelan
------------------------------------------
Name: Jon Whelan
By: /s/ Chris Maroney
------------------------------------------
Name: Chris Maroney
By: /s/ Thomas Whelan
------------------------------------------
Name: Thomas Whelan
By: /s/ David Sampson
------------------------------------------
Name: David Sampson
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EXHIBIT A
Register.com, Inc.
575 Eighth Avenue, Eleventh Floor
New York, New York 10018
Attention: Jack S. Levy, General Counsel
Telecopier: (212) 594-9448
Jon Whelan
33 Greenwich Avenue
New York, NY 10014
Chis Maroney
21 Columbia Place, 4F
Brooklyn, NY 11201
Thomas V. Whelan
18 Jersey Avenue
Spring Lake, New Jersey 07762
Telecopier: (732) 974-0729
David W. Sampson:
72 Pye Brook Lane
Boxford, Massachusetts 01921
Telecopier: (978) 750-4538
