<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO 13d-2(a)
IVI Publishing, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
450707 10 4
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(CUSIP Number)
Paula V. Duffy, Esq.
Davidson & Associates, Inc.
19840 Pioneer Avenue
Torrance, California 90503
(310) 793-0600
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 10, 1997
- --------------------------------------------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on following pages)
Page 1 of 39 Pages
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CUSIP NO. 450707 10 4 13D PAGE 2 OF 39 PAGES
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- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DAVIDSON & ASSOCIATES, INC.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(D) OR 2(E)
5
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
CALIFORNIA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 1,000,000
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 1,000,000
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,000,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
9.9%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP NO. 450707 10 4 13D PAGE 3 OF 39 PAGES
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ITEM 1. SECURITY AND ISSUER.
(a) Name of Issuer:
--------------
IVI Publishing, Inc. (the "Issuer").
(b) Address of Issuer's Principal Executive Offices:
-----------------------------------------------
7500 Flying Cloud Drive, Minneapolis, Minnesota 55344-3739.
(c) Title of Class of Equity Securities:
-----------------------------------
Common Stock, par value $.01 per share.
(d) CUSIP No.:
---------
450707 10 4.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name of Person Filing:
---------------------
The person filing this Schedule 13D is Davidson & Associates,
Inc., a California corporation ("Davidson"). The name, business
address, present principal occupation or employment and citizenship of
each control person and each executive officer and director of
Davidson and each such control person are set forth in Schedule A
hereto which is incorporated herein by reference.
(b) Place of Organization:
---------------------
Davidson is organized in California.
(c) Principal Business:
------------------
Davidson develops, publishes, manufactures and distributes high-
quality educational and entertainment software products for home and
school use.
(d) Principal Business Address:
--------------------------
The principal business address of Davidson is 19840 Pioneer
Avenue, Torrance, California 90503.
(e) Legal Proceedings:
-----------------
Not applicable.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On November 10, 1997, the Issuer issued to Davidson 1,000,000 shares
of Common Stock in exchange (the "Exchange") for 2,000 shares of 6%
Series A Convertible Redeemable Preferred Stock (the "Preferred
Stock") of the Issuer held by Davidson and the concurrent cancellation
of a warrant to purchase 12,500 shares of Common Stock of the Issuer
(the "Warrant") held by Davidson. The Preferred Stock and the Warrant
were originally acquired by Davidson for an aggregate purchase price
of $2,000,000 pursuant to a Subscription Agreement dated as of October
31, 1995 (the "Subscription Agreement"), between the Issuer and
Davidson, a copy of which is attached as Exhibit 1 hereto. The source
of funds for the original acquisition of the Preferred Stock was the
working capital of Davidson. The shares of Preferred Stock were
convertible by Davidson, at its option, into shares of Common Stock at
an initial conversion price of $11.21 per share, subject to customary
adjustments. The Exchange was consummated pursuant to a letter
Agreement dated October 30, 1997 (the "Letter Agreement"), between
Davidson and the Issuer, a copy of which is attached as Exhibit 2
hereto, which provided that the Exchange would be consummated upon the
satisfaction of certain conditions precedent described therein. The
conditions precedent to the Exchange were satisfied as of November 10,
1997.
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CUSIP NO. 450707 10 4 13D PAGE 4 OF 39 PAGES
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ITEM 4. PURPOSE OF TRANSACTION.
(a) Davidson originally acquired the Preferred Stock and the Warrant
for investment purposes pursuant to the terms of the Subscription
Agreement. In October 1997, the Issuer offered to exchange 1,000,000
shares of its Common Stock for all of the shares of Preferred Stock
held by Davidson and the cancellation of the Warrant, and Davidson
agreed to enter into the Exchange, subject to the satisfaction of
certain conditions precedent described in the Letter Agreement.
Although Davidson may reach a different determination at any time,
subject to market conditions, Davidson currently intends to sell all
of the shares of Common Stock received in the Exchange, which sales
may be effectuated in brokerage transactions or in private
transactions, and in increments over time or in block transactions.
Davidson is also entitled to cause the Issuer to register the shares
of Common Stock for resale under the Securities Act of 1933, as
amended (the "Securities Act"), under certain circumstances as
described in Item 6 below. Because at least two years has elapsed
since Davidson acquired the shares of Preferred Stock and the shares
of Common Stock acquired in the Exchange are deemed to have been
acquired by Davidson at the same time that the shares of Preferred
Stock were acquired, the shares of Common Stock are currently freely
tradable pursuant to Rule 144(k) promulgated under the Securities Act.
(b)-(j) Except as set forth in the preceding paragraph, Davidson does
not have, and, to the best of its knowledge, Davidson's or CUC's
directors or executive officers do not have, any present plan or
proposal which relates to or would result in any of the circumstances
enumerated in paragraphs (b) through (j) of this Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Amount Beneficially Owned and Percent of Class:
----------------------------------------------
1,000,000 shares of Common Stock, which constitutes 9.9% of such
class.
(b) Voting and Dispositive Power:
----------------------------
Davidson has (i) sole voting and dispositive power with respect
to 1,000,000 shares of Common Stock and (ii) shared voting power with
respect to no shares of Common Stock.
(c) Other Transactions:
------------------
Not applicable.
(d) Interests of Other Persons:
--------------------------
Davidson is a wholly owned subsidiary of CUC International Inc.,
a Delaware corporation ("CUC"), and thus CUC may be deemed to have the
right to receive and the power to direct the receipt of dividends
from, or the proceeds from the sale of, the shares of Common Stock.
The principal business address of CUC is: 707 Summer Street, Stamford,
Connecticut 06901.
(e) Date on Which the Reporting Person Ceased to be the Beneficial
--------------------------------------------------------------
Owner of More than Five Percent of Class:
----------------------------------------
Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to a Registration Rights Agreement dated October 31, 1995
(the "Registration Rights Agreement"), by and between the Issuer and
Davidson, Davidson has certain "demand" and "piggyback"
registration rights with respect to shares of Common Stock of the
Issuer. These registration rights are described more fully in the
Registration Rights Agreement, a copy of which is attached hereto as
Exhibit 3.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Subscription Agreement dated as of October 31, 1995.
2. Letter Agreement dated October 30, 1997.
3. Registration Rights Agreement dated as of October 31, 1995.
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CUSIP NO. 450707 10 4 13D PAGE 5 OF 39 PAGES
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
DAVIDSON & ASSOCIATES, INC.
By: /s/ Lawrence S. Gross November 18, 1997
------------------------
Name: Lawrence S. Gross
Title: President
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 6 OF 39 PAGES
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EXHIBIT 1
---------
IVI PUBLISHING, INC.
SUBSCRIPTION AGREEMENT
----------------------
THIS SUBSCRIPTION AGREEMENT AND THE ACCOMPANYING MATERIALS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY A SECURITY IN
ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
AN OFFER OR SOLICITATION.
IN MAKING AN INVESTMENT DECISION THE INVESTOR MUST RELY ON ITS OWN
EXAMINATION OF IVI PUBLISHING, INC. (THE "COMPANY"), ITS MANAGEMENT AND THE
TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS THEREOF. NEITHER (I) THE
SHARES OF PREFERRED STOCK, (II) THE COMMON STOCK UNDERLYING SUCH PREFERRED
STOCK, (III) THE WARRANTS TO PURCHASE SHARES OF COMMON STOCK NOR (IV) THE COMMON
STOCK UNDERLYING SUCH WARRANTS (COLLECTIVELY, THE "SECURITIES") WHICH ARE THE
SUBJECT OF THIS SUBSCRIPTION AGREEMENT HAVE BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF AN INVESTMENT IN SUCH
SECURITIES, NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), NOR HAVE THE SECURITIES BEEN REGISTERED UNDER
THE SECURITIES LAWS OF ANY STATE. THE SALE OF THE SECURITIES IS BEING MADE BY
THE COMPANY IN RELIANCE ON APPLICABLE EXEMPTIONS UNDER THE SECURITIES ACT AND/OR
THE RULES PROMULGATED THEREUNDER. AS A CONDITION TO ANY SALE, THE COMPANY WILL
BE RELYING ON CERTAIN REPRESENTATIONS AND WARRANTIES FROM THE UNDERSIGNED AS SET
FORTH IN THIS AGREEMENT TO THE EFFECT, AMONG OTHER THINGS, THAT THE INVESTOR IS
ACQUIRING THE SECURITIES SOLELY FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TOWARD
DISTRIBUTION OR FRACTIONALIZATION.
INVESTMENT IN THE SECURITIES IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. THE INVESTOR MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 7 OF 39 PAGES
- ------------------------- ------------------
SUBSCRIPTION AGREEMENT (this "Subscription Agreement") dated as of October
31, 1995 between IVI PUBLISHING, INC., a Minnesota corporation (the "Company"),
and the party set forth on the signature page hereto (the "Investor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Investor desires to subscribe for and purchase from the
Company, and the Company desires to issue and to sell to the Investor, (i) the
number of shares of preferred stock, $.01 par value, designated as 6%
Convertible Series A Preferred Stock (the "Series A Preferred Stock") of the
Company and (ii) the number of warrants, $.01 par value (the "Warrants"), to
purchase common stock, $.01 par value (the "Common Stock"), of the Company, in
each case as set forth on the signature page hereof, upon the terms and
conditions hereinafter set forth. The Series A Preferred Stock and the Warrants
(together with the shares of the Common Stock underlying the Series A Preferred
Stock and the Warrants) are collectively referred to herein as the "Securities."
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby acknowledge, agree and understand the
following:
1. Subscription.
------------
(a) Share Purchase. The Investor hereby subscribes for the Securities
--------------
set forth on the signature page of this subscription Agreement in exchange for
the consideration set forth in Section 1(b) below. The Company's acceptance of
the Investor's subscription shall be deemed acknowledgment of its receipt of
such funds.
(b) Consideration. In consideration of the delivery to the Investor
-------------
by the Company of that number of shares of (i) Series A Preferred Stock and (ii)
Warrants set forth on the signature page hereto, the Investor hereby agrees to
simultaneously deliver to the Company $2,000,000 in immediately available United
States funds (the "Purchase Price") by electronic wire transfer to an account
designated by the Company to the Investor prior to the Closing.
2. The Closing. The closing of the purchase and sale of the Securities
-----------
(the "Closing") shall take place at the offices of the Company, 7500 Flying
Cloud Drive, Minneapolis, Minnesota 55344 at 10:00 a.m., Minneapolis time, on
October 31, 1995, or at such other place or time as shall be agreed upon by the
parties hereto. The date of the Closing is referred to herein as the "Closing
Date."
3. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to the Investor as follows:
(a) Organization. The Company is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Minnesota.
The Company has no subsidiaries other than those listed on Schedule 3(a) hereto
-------------
and, other than as set forth on Schedule 3(a), the Company does not own,
-------------
directly or indirectly, any ownership, equity, profits,
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CUSIP NO. 450707 10 4 13D PAGE 8 OF 39 PAGES
- ------------------------- ------------------
residual or voting interest in any corporation, partnership, joint venture or
other entity and has no agreement or commitment to purchase any such interest.
(b) Power and Authority. The Company has the requisite corporate
-------------------
power and authority and full legal right to enter into this Subscription
Agreement, the Registration Rights Agreement, dated as of the date hereof (the
"Registration Rights Agreement") among the Company and the Investor and the
Warrant Agreement, dated as of the date hereof (the "Warrant Agreement"),
between the Company and the Investor, to perform, observe and comply with all of
its agreements and obligations hereunder and thereunder and to issue the
Securities to the Investor. This Subscription Agreement, the Registration
Rights Agreement. the Warrant Agreement and the documents executed and delivered
by the Company in accordance herewith and therewith are collectively referred to
herein as the "Transaction Documents."
(c) Due Authorization. The execution and delivery by the Company of
-----------------
the Transaction Documents, the performance by it of all of its agreements and
obligations under the Transaction Documents and the issuance of the Securities,
have been duly authorized by all necessary corporate action on the part of the
Company.
(d) Enforceability. Assuming the due execution and delivery of the
--------------
Transaction Documents by the Investor, each of the Transaction Documents is a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(e) Due and Valid Execution. Each of the Transaction Documents to be
-----------------------
executed and delivered by the Company has been duly and validly executed and
delivered by the Company.
(f) Capitalization. At the Closing Date, the authorized capital stork
--------------
of the Company will consist of 30,000,000 shares of capital stock, $.01 par
value, of which 20,000,000 shares have been designated as Common Stock, 2,000
have been designated as the Series A Preferred Stock and 9,998,000 remain
undesignated. As of September 30, 1995 there were issued and outstanding
7,479,581 shares of Common Stock, employee stock, options to purchase 937,584
shares of Common Stock of which options to purchase an aggregate of 491,613
shares of Common Stock were exercisable and warrants to purchase 437,051 shares
of Common Stock. Immediately following the Closing, 2,000 shares of the Series
A Preferred Stock will be issued and outstanding. All outstanding shares of
capital stock of the Company have been duly authorized and validly issued, are
fully paid and non-assessable. The shares of Series A Preferred Stock
subscribed for hereunder will, at the time of issuance, have been duly
authorized and validly issued and, upon receipt by the Company of the Purchase
Price, will be fully paid and non-assessable. All of the shares of Common Stock
underlying the Series A Preferred Stock and the Warrants have been duly and
validly authorized and reserved for issuance, and upon the due and proper
conversion of the Series A Preferred Stock or the due and proper exercise of the
Warrants, as the case may be, and payment of the applicable conversion price or
exercise price, will be
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CUSIP NO. 450707 10 4 13D PAGE 9 OF 39 PAGES
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validly issued, fully paid and non-assessable. Except as set forth in
this Section 3(f) there are outstanding (i) no other shares of capital stock or
other voting securities of the Company, (ii) no securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (iii) no other options or other rights to acquire
from the Company, and no obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company.
(g) Agreements Not in Breach of Other Instruments. The execution and
---------------------------------------------
delivery of the Transaction Documents by the Company and the consummation of the
transactions contemplated hereby and thereby will not result in a breach of any
of the terms and provisions of, or constitute a default under, or conflict with,
any contract or any other agreement, indenture or other instrument to which the
Company is a party or by which it is bound, the Articles of Incorporation or
Bylaws of the Company, any judgment, decree, order or award of any court,
governmental body or arbitrator, or any law, rule or regulation applicable to
the Company.
(h) Title. The Company has been authorized and directed to issue and
-----
deliver the Securities to the Investor which it is issuing pursuant to this
Subscription Agreement, and such Securities will be issued and delivered free
and clear of all mortgages, liens, claims, encumbrances and other security
arrangements or restrictions of any kind whatsoever, except such restrictions as
may be imposed by the terms of this Subscription Agreement or applicable
securities laws.
(i) SEC Filings.
-----------
(i) The Company has delivered to the Investor (A) the annual
reports on Form 10-K for its fiscal years ended 1993 and 1994, (B) its
quarterly report on Form 10-Q for its fiscal quarter ended June 30, 1995,
(C) its proxy or information statements relating to meetings of, or actions
taken without a meeting by, the stockholders of the Company held since
December 31, 1994, and (D) all of its other reports, statements, schedules
and registration statements filed with the Securities and Exchange
Commission (the "SEC") since December 31, 1994.
(ii) As of filing date, each such report or statement filed
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(iii) Each such registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), as of the date such statement or
amendment became effective did not contain any 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 not misleading.
-4-
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CUSIP NO. 450707 10 4 13D PAGE 10 OF 39 PAGES
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(j) Financial Statements.
--------------------
(i) The audited financial statements and unaudited interim
financial statements of the Company included in it,; annual reports on Form
10-K and the quarterly report on Form 10-Q referred to in Section 3(i)
fairly present, in conformity with generally ;accepted accounting
principles, applied on a consistent basis (except as may be indicated in
the notes thereto), the financial position for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
(ii) Except as and to the extent set forth in the Balance Sheet
(as defined below), the Company does not have any liability or obligation
of any nature (whether accrued, absolute, contingent or otherwise) required
to be disclosed by generally accepted accounting principles, except for
liabilities and obligations incurred after the Balance Sheet Date (as
defined below) in the ordinary course of business which would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, business, assets or properties of the Company (a
"Material Adverse Effect"). For purposes of this Agreement, "Balance
Sheet" means the Company's balance sheet as of June 30, 1995, including the
notes thereto, as set forth in the Company's 10-Q referred to in Section
3(i) and "Balance Sheet Date" means the date of the Business Sheet.
(k) Litigation. There is no action, suit, investigation or proceeding
----------
pending against or, to the knowledge of the Company, threatened against or
affecting, the Company or any of its respective properties before any court or
arbitrator or any governmental body, agency or official which, if determined or
resolved adversely to the Company, would reasonably be expected to have a
Material Adverse Effect, nor is there any judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or arbitrator outstanding against the Company having, or which, insofar as can
reasonably be foreseen, in the future may have, any such effect.
(l) Full Disclosure; No Misrepresentations. No information contained
--------------------------------------
in the representations and warranties of the Company, set forth in this
Agreement or in any of the exhibits attached hereto or to be delivered to the
Investor hereunder contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
4. Representations and Warranties of the Investor. The Investor hereby
----------------------------------------------
represents and warrants to the Company as follows:
(a) Investment Intention. The Investor is acquiring the Securities
--------------------
for investment solely for its own account and not with a view to, or for resale
in connection with, the distribution or other disposition thereof. The Investor
agrees and acknowledges that all dispositions of the Securities will comply with
the applicable provisions of state and federal securities laws. The Investor
also acknowledges transfer of the Securities will be severely restricted. The
Investor further acknowledges that the Company will not Consent to a transfer of
the Securities unless (i) the Securities have been registered under the
Securities Act, (ii) a valid
-5-
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CUSIP NO. 450707 10 4 13D PAGE 11 OF 39 PAGES
- ------------------------- -------------------
exemption from. the registration requirements of the Securities Act exists with
respect to such Securities, (iii) the transferee meets the financial and other
suitability standards required of an initial subscriber or (iv) such conditions
are waived by the Company in its sole discretion. The Company may, in its sole
and absolute discretion, require the Investor to deliver an opinion of counsel
(from a law firm and in form and substance reasonably satisfactory) to the
Company to the effect that any such transfer is exempt from the registration
requirements of the Securities Act and any applicable state securities laws.
The Investor further acknowledges that the Company is under no obligation to
register the Securities under the Securities Act on behalf of the Investor
(except as set forth in the Registration Rights Agreement with respect to the
shares of Common Stock underlying the Securities), to assist the Investor in
complying with any exemption from registration.
(b) Securities Unregistered. The Investor acknowledges and represents
-----------------------
that it has been advised by the Company that:
(i) the offer and sale of the Securities have not been registered
under the Securities Act or any state securities laws;
(ii) the Securities must be held indefinitely and the Investor
must continue to bear the economic risk of the investment in the Securities
unless the offer and sale of such Securities is subsequently registered
under the Securities Act and all applicable state securities laws or an
exemption from such registration is available;
(iii) there is no established market for the Series A Preferred
Stock and it is not anticipated that there will be any public market for
the Series A Preferred Stock in the foreseeable future;
(iv) when and if the Securities may be disposed of without
registration under the Securities Act in reliance on Rule 144, such
disposition may be made only in limited amounts in accordance with the
terms and conditions of such Rule;
(v) a restrictive legend in the following form shall be placed on
the certificates representing Securities;
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS SUCH
OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION
OR IS OTHERWISE IN COMPLIANCE WITH SUCH ACT.
A STATEMENT SUMMARIZING THE VOTING POWERS, DESIGNATIONS, PREFERENCES,
LIMITATIONS, RESTRICTIONS AND RELATIVE RIGHTS OF THE VARIOUS CLASSES OF
STOCK OR SERIES THEREOF MAY BE OBTAINED BY THE STOCKHOLDERS OF THE COMPANY,
WITHOUT CHARGE, FROM THE PRINCIPAL OFFICES OF THE COMPANY."
-6-
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CUSIP NO. 450707 10 4 13D PAGE 12 OF 39 PAGES
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(vi) a notation shall be made in the appropriate records of the
Company indicating that the Securities are subject to restrictions on
transfer and appropriate stop transfer instructions will be issued with
respect to the Securities.
(c) Additional Investment Representations.
-------------------------------------
(i) The Investor has carefully reviewed, is familiar with and
understands each of the Articles of Incorporation and Bylaws of the Company
and the other documents, records and information, if any, requested by the
Investor or otherwise supplied by the Company;
(ii) All documents, records and information pertaining to an
investment in the Company which have been requested by the Investor have
been made available or delivered to the Investor;
(iii) No oral or written statement, printed material or
inducement given or made by the Company or affiliate any of the Company is
contrary to the information contained herein, and the Investor acknowledges
and agrees that in making its decision to purchase the Securities it has
relied solely on its own information, the information provided to the
Investor by the Company pursuant to this Subscription Agreement, and the
other documents, records and information requested by the Investor and
independent investigations made by the Investor and, to the extent believed
by the Investor to be appropriate, the Investor's representatives,
including the Investor's own professional, financial, tax and other
advisors;
(iv) The Investor qualifies as an "accredited investor" as such
term is defined in Rule 501 promulgated under the Securities Act, and the
information set forth on the signature page hereto is true and correct in
all material respects;
(v) The Investor is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization;
(vi) The Investor has the requisite corporate power and authority
and full legal right to enter into the Transaction Documents to perform,
observe and comply with all of its agreements and obligations hereunder and
thereunder;
(vii) The execution and delivery of the Transaction Documents,
the performance by the Investor of all of its agreements and obligations
under the Transaction Documents, have been duly authorized by all necessary
corporate action on the part of the Investor;
(viii) The Investor is authorized and otherwise duly qualified
to purchase and hold the Securities and the Investor has not been formed
for the specific purpose of purchasing the Securities;
(ix) Assuming the due execution and delivery of the Transaction
Documents by the Company, each of the Transaction Documents is a valid and
binding
-7-
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CUSIP NO. 450707 10 4 13D PAGE 13 OF 39 PAGES
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obligation of the Investor, enforceable against the Investor in accordance
with its terms, except as such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating; to creditors rights generally and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and
(x) None of the following has ever been represented, guaranteed
or warranted to the Investor by or on behalf of the Company:
(A) that the Company will be profitable or that the Investor
will realize tax benefits in connection with an investment in the
Securities, or that the Investor will realize profits or losses, as a
result of its investment in the Securities; or
(B) that the past, performance or experience on the part of
any officer, director, stockholder, employee, agent or affiliate
thereof, or any employee, agent or affiliate of the Company will in
any way indicate the predictable results of ownership of capital stock
of the Company or of the overall venture.
5. Indemnification.
---------------
(a) Indemnification of the Company and the Company Affiliates. For a
---------------------------------------------------------
period of three years from and after the date hereof, the: Investor shall
indemnify and hold harmless the Company, its Control Persons and Affiliates
(each as defined in the Exchange Act) (each a "Company Indemnified Party") from
and against any loss, damage or expense, including, without limitation,
reasonable attorneys' and consultants' fees, disbursements and expenses,
suffered by the Company or any Company Indemnified Party arising or resulting
from any inaccuracy in, or breach of any of the representations, warranties,
covenants or agreements made by Investor herein or in any of the other
Transaction Documents.
(b) Indemnification of the Investor. For a period of three years from
-------------------------------
and after the date hereof, the Company shall indemnify and hold harmless the
Investor, its Control Persons and Affiliates (each as defined in the Exchange
Act) (each an "Investor Indemnified Party"), as applicable, from and against any
loss, damage or expense, including, without limitation, reasonable attorneys'
and consultants' fees, suffered by the Investor or any Investor Indemnified
Part), arising or resulting from any inaccuracy in or breach of any of the
representations, warranties, covenants or agreements made by the Company herein
or in any of the other Transaction Documents.
(c) Procedure for Claims. Within ten days after obtaining written
--------------------
notice of any claim or demand which has given rise to, or could reasonably give
rise to, a claim for indemnification hereunder, the party seeking
indemnification shall give written notice of such claim ("Notice of Claim") to
the other party. Failure to give such notice by the party seeking
indemnification within said ten day period shall not relieve the indemnifying
party of its obligations hereunder, unless the failure to so notify the
identifying party actually results in
-8-
<PAGE>
- ------------------------- -------------------
CUSIP NO. 450707 10 4 13D PAGE 14 OF 39 PAGES
- ------------------------- -------------------
damage or prejudice to such indemnifying party. Notice of Claim shall set forth
a brief description of the facts giving rise to such claim and the amount (or a
reasonable estimate) of the loss, damage or expense suffered, or which may be
suffered, by the party seeking indemnification.
Upon receiving the Notice of Claim, the indemnifying party shall
resist, settle or otherwise dispose of such claim in such manner as it shall
deem appropriate, including the employment of counsel, and shall be responsible
for the payment of all expenses, including the reasonable fees and expenses of
such counsel. The indemnified party shall have the right to employ separate
counsel in any such action and to participate in or assume the defense thereof,
but the fees and expenses of such counsel shall be at the indemnified party's
expense unless (i) the employment has been specifically authorized by the
indemnifying party in writing, (ii) the indemnifying party has failed to assume
the defense and employ counsel in a timely manner or (iii) the named parties to
any action (including any impleaded parties) include both Investor and the
Company, and the indemnified party has been advised by such counsel that
representation of the Company and the Investor by the same counsel would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them (in which case, if the indemnified
party notifies the indemnifying party in writing that the indemnified party
elects to employ separate counsel at the expense of the Indemnifying party, the
indemnifying party shall have neither the right nor the obligation to assume the
defense of such action on behalf of the indemnified party).
(d) Third Party Beneficiaries. Nothing contained in this Section 5
-------------------------
shall confer any rights upon, or inure to the benefit of, any third party other
than those parties specified in Sections 5(a) and 5(b) above, it being
understood( that such parties, to the extent not actually parties hereto, shall
be third party beneficiaries.
6. Condition to the Company's Obligations. The obligation of the Company
--------------------------------------
to consummate the transactions contemplated hereby is expressly conditioned
upon:
(a) the execution and delivery by the Investor of the Transaction
Documents; and
(b) payment by the Investor to the Company of the Purchase Price.
7. Conditions to Investor's Obligations. The obligation of the Investor
------------------------------------
to consummate the transactions contemplated hereby is expressly conditioned
upon:
(a) the execution and delivery of by the Company of the Transaction
Documents;
(b) the delivery to the Investor of certificates evidencing the Shares
of Series A Preferred Stock and warrant certificates evidencing the Warrants,
each issued in the name of the Investor; and
(c) the delivery to the Investor of an opinion of counsel to the
Company with respect to (1) the matters set forth in the fifth and sixth
sentences of Section 3(f) above and
-9-
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 15 OF 39 PAGES
- ------------------------- -------------------
(ii) the enforceability of the Certificate of Designation of the Series A
Preferred Stock and the Warrant Agreement.
8. Miscellaneous.
-------------
(a) Notices. Any and all notices or other communications provided for
-------
herein shall be in writing and shall be considered duly given upon the earliest
to occur of (i) personal delivery, (ii) two days after being delivered to a
reputable overnight mail delivery courier or service, (iii) five days after
being mailed by certified or registered mail, return receipt requested, postage
prepaid or (iv) the delivering parties' receipt of a written confirmation of a
facsimile transmission. All notices shall be addressed to the Company at its
principal office and to the investor at its address last appearing on the stock
records of the Company. Any party hereto may change its address by giving
notice to the other party hereto as provided herein.
(b) Effect and Interpretation. Notwithstanding the place where this
-------------------------
Subscription Agreement may be executed by any of the parties hereto, the parties
expressly agree that all terms and provisions hereof shall be construed in
accordance with and governed by the laws of the State of Minnesota without
regard to the conflicts of laws provisions thereof.
(c) Entire Agreement. The Transaction Documents constitute the entire
----------------
agreement between the parties hereto with respect to the subject matter hereof
any may be amended only by a writing executed by all parties. The Transaction
Documents and the information contained herein expressly supersede all
understandings and agreements of the parties, whether written or oral, between
the parties with respect to the subject matter hereof.
(d) Successors. This Subscription Agreement and all the terms and
----------
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto, and their Respective heirs, legal representatives, permitted
successors and permitted assigns.
(e) Pronouns and Headings. As used herein, all pronouns shall include
---------------------
the masculine, feminine, neuter, singular and plural wherever the context and
facts require such construction. The descriptive headings in the sections of
this Subscription Agreement are inserted for convenience of reference only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
(f) Severability. If any provision of this Subscription Agreement is
------------
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such provision shall be severed and enforced to the extent
possible or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability thereof shall not affect the
validity, legality or enforceability of the remaining provisions of this
Subscription Agreement.
(g) Counterparts. This Subscription Agreement may be executed
------------
simultaneously in one or more counterparts each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
-10-
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 16 OF 39 PAGES
- ------------------------- -------------------
(h) No Assignment. This Subscription Agreement and the rights and
-------------
obligations of the parties hereunder may not be assigned or delegated without
the prior written consent of the non-assigning or non-delegating party.
(i) Service of Process; Waiver of Jury Trial. The parties hereby
----------------------------------------
consent to process being served in any suit, action or proceeding of the nature
referred to above (A) by the mailing of a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to its address shown
below its signature hereto or (B) by serving; a copy thereof upon any party's
authorized agent for service of process (to the extent permitted by applicable
law, regardless whether the appointment of such agent for service of process for
any reason shall prove to be ineffective or such agent for service of process
shall accept or acknowledge such service); provided that, to the extent lawful
--------
and practicable, written notice of said service upon said agent shall be mailed
by registered or certified mail, postage prepaid, return receipt requested, to
either party at its address shown below its signature hereto. The parties agree
that such service, to the fullest extent permitted by law, (1) shall be deemed
in every respect effective service of process upon it in any such suit, action
or proceeding and (2) shall be taken and held to be valid personal service upon
and personal delivery to it. Nothing herein shall affect either party's right
to serve process in any other manner permitted try law.
THE PARTIES HERETO IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH THE TRANSACTION DOCUMENTS OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR
RELATED TO THE TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, the parties have executed this Subscription Agreement
as of the day and year first above written.
THE COMPANY:
-----------
IVI PUBLISHING, INC., a Minnesota corporation
By: /s/ Thomas P. Skiba
---------------------
Title: Vice President and Chief Financial
Officer
-11-
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 17 OF 39 PAGES
- ------------------------- -------------------
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT
FOR CORPORATE AND PARTNERSHIP INVESTORS
---------------------------------------
Note: This page must be executed by an officer (in the case of a corporation)
- ----
or other authorized agent (in the case of a partnership) authorized to bind the
corporation or partnership.
The undersigned hereby subscribes for the following Securities:
Number of Shares of Series A Preferred Stock: 2,000
Number of Warrants: 12,500
Total Purchase Price: $2,000,000
Name of Investor:
DAVIDSON & ASSOCIATES, INC.
By: /s/ J.R. Allewaert
--------------------
Its: CFO
Taxpayer Identification No.:
----------
Address of Principal Place of Business:
19840 Pioneer Ave.
Torrance, CA 90530
Date: 10/31/95
===============================================================================
Below this line to be completed by the Company Only
SUBSCRIPTION FOR THE ABOVE DESCRIBED SECURITIES ACCEPTED AS OF OCTOBER 31, 1995
IVI PUBLISHING, INC., a Minnesota corporation
By: /s/ Thomas P. Skiba
---------------------
Title: Vice President and Chief Financial
Officer
<PAGE>
- ------------------------- -------------------
CUSIP NO. 450707 10 4 13D PAGE 18 OF 39 PAGES
- ------------------------- -------------------
STATE OF )
)
COUNTY OF )
I, _____________________________, a Notary Public in and for said County,
in the State aforesaid, do hereby certify that the person whose name is
subscribed to above. known to me to be the ________________________ of Davidson
& Associates, Inc., appeared before me this day in person, and acknowledged and
swore that he signed and delivered the said instruments on behalf of said entity
for the uses and purposes therein set forth, and that the statements contained
therein are true.
Give under my hand and notarial seal as of the _____ day of ______________,
1995.
My Commission expires:
- ----------------------------- ----------------------------------
Notary Public
<PAGE>
- ------------------------- -------------------
CUSIP NO. 450707 10 4 13D PAGE 19 OF 39 PAGES
- ------------------------- -------------------
SCHEDULE 3(a)
-------------
SUBSIDIARIES AND INVESTMENTS IN OTHER ENTITIES
----------------------------------------------
1. IVI Direct, Inc., a Minnesota corporation.
2. Investment in America's Health Network, Inc.
3. Virtual Communications, Inc.
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 20 OF 39 PAGES
- ----------------------- ---------------------
EXHIBIT 2
---------
LETTER AGREEMENT
DAVIDSON & ASSOCIATES, INC.
19840 Pioneer Avenue
Torrance, CA 90503
October 30, 1997
Charles A. Nickoloff
Chief Financial Officer
IVI Publishing, Inc.
7500 Flying Cloud Drive
Minneapolis, MN 55344-3739
Re: Exchange of Convertible Redeemable Preferred Stock for Common Stock
Dear Mr. Nickoloff:
Davidson & Associates, Inc. ("Davidson") and IVI Publishing, Inc. (the
"Company") hereby agree that, on the terms and conditions contained herein,
Davidson may tender to the Company 2,000 shares of 6% Series A Convertible
Redeemable Preferred Stock ("Preferred Stock") in exchange for 1,000,000 newly
issued, fully paid shares of the Company's Common Stock (the "Exchange").
Davidson hereby elects to exchange its 2,000 shares of Preferred Stock for
1,000,000 shares of Common Stock, subject to the condition that, prior to
consummation of the Exchange, Davidson shall have received, in form and
substance satisfactory to Davidson in its sole discretion, (i) an officer's
certificate executed by the chief executive officer or chief financial officer
of the Company certifying that (a) all of the Company's outstanding Convertible
Debentures have been converted into shares of Common Stock, (b) there are
9,105,475 shares of Common Stock issued and outstanding immediately prior to the
Exchange and (c) the Board of Directors has approved this agreement and the
issuance of shares of Common Stock to Davidson in the Exchange on the terms
described herein (with a copy of the applicable Board resolutions attached); and
(ii) an opinion of counsel that (a) all of the shares of Common Stock to be
issued to Davidson in the Exchange have been duly and validly authorized and,
when issued, will be validly issued, fully paid and nonassessable, (b) the
execution of this agreement and the consummation of the transaction contemplated
hereby do not and will not contravene or result in a breach or violation of the
charter or bylaws of the Company, any agreement to which the Company is a party
or any law, rule, regulation or order binding upon the Company, and (c) the
issuance of the shares of Common Stock to be issued to Davidson in the Exchange
is exempt from the registration
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 450707 10 4 13D PAGE 21 OF 39 PAGES
- ----------------------- ---------------------
requirements of Section 5 of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 3(a)(9) of the Securities Act.
The Common Stock shall be issued with an appropriate restrictive securities
legend in the name of Davidson and mailed to Davidson's address written below
and shall be accompanied by the payment of dividends accrued and unpaid as the
date of Exchange. Upon such Exchange, we understand that all redemption rights
will be terminated, but, in all other respects, all of Davidson's rights under
the Subscription Agreement and the Registration Rights Agreement entered into at
the time Davidson acquired the Preferred Stock shall apply to the shares of
Common Stock acquired in the Exchange. We have enclosed the certificate
representing Davidson's 2,000 shares of Preferred Stock, to be held by the
Company and exchanged for 1,000,000 shares of Common Stock in the event the
Exchange occurs. Also enclosed herewith is Davidson's warrant to purchase
12,500 shares of IVI Common Stock (the "Warrant") and an assignment separate
from the Warrant, which we agree may be canceled if and when the Exchange
occurs.
In the event the Exchange does not occur on or before November 15, 1997, you are
instructed to return the Warrant and the certificate representing Davidson's
Preferred Stock to Davidson, in which event the Exchange and the cancellation of
the Warrant contemplated hereby shall not occur, absent later written
instructions from Davidson reconfirming its election to proceed.
Beginning immediately upon issuance, we understand that Davidson will be able to
sell the Common Stock subject to the limitations and conditions of Rule 144.
(Among other things, Rule 144 limits the number of shares which can be sold in
any three-month period to the greater of one percent of the outstanding common
stock of IVI or the average weekly trading volume of the Common Stock during the
four calendar weeks proceeding any trade.) As of November 1, 1997, the Common
Stock will be free from all sales restrictions.
In connection with Davidson's election to exchange its shares of Preferred
Stock, Davidson hereby represents and warrants that it is familiar with the
Company's periodic reports filed with the Securities and Exchange Commission and
press releases and has had the opportunity to meet with representatives of the
Company for the purpose of asking questions regarding the Company's business.
In connection with Davidson's election to exchange its shares of Preferred
Stock, the Company hereby represents and warrants that (i) no commission or
other remuneration has been paid or given directly or indirectly for soliciting
the Exchange and (ii) all of the representations and warranties of the Company
contained in Section 3 of the Subscription Agreement are true and correct as of
the date hereof with the same effect as if such representations and warranties
were made as of the date hereof (for such purpose all references to the
Company's annual and quarterly reports on Forms 10-K and 10-Q continued in
Section 3 of the Subscription Agreement shall be deemed to refer to the
Company's most recent annual report on Form 10-K and all quarterly reports on
Form 10-Q filed thereafter), except that Section 3(k) of the Subscription
Agreement containing representations with respect to litigation shall be amended
to add the following clause at the beginning of such Section: "Except as
disclosed in reports and statements previously filed with the SEC, as to which
the representatives of the Company and Davidson have had discussions,".
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 22 OF 39 PAGES
- ----------------------- ---------------------
If this Agreement is satisfactory to the Company, the Company should so indicate
by executing and delivering to Davidson a copy hereof, whereupon it shall become
a binding agreement between the Company and Davidson.
Sincerely,
DAVIDSON & ASSOCIATES, INC.
/s/ Paula V. Duffy
______________________________________
By: _________________________________
Enc.: Original Warrant and Redeemable Preferred Stock Certificate
Agreed to as of October 30, 1997
IVI PUBLISHING, INC.
/s/ Charles A. Nickoloff
______________________________________
By: V.P. & Secretary
_________________________________
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 23 OF 39 PAGES
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EXHIBIT 3
---------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
Registration Rights Agreement (the "Agreement"), dated as of October 31,
1995, by and between IVI Publishing, Inc., a Minnesota corporation (the
"Company"), and the Person(s) named in Schedule I hereto who execute
----------
counterparts of this Agreement.
R E C I T A L S:
- - - - - - - -
A. This Agreement is made pursuant the Subscription Agreement, dated as
of the date hereof (the "Subscription Agreement") between the Company and
Davidson & Associates, Inc. ("Davidson"), which agreement provides for the sale
and issuance by the Company to Davidson of 2,000 shares of the Company's 6.0%
Series A Convertible Preferred Stock, par value $.01 per share (the "Series A
Preferred Stock") and warrants, par value $.01 (the "Warrants") to acquire
12,500 shares of the Company's common stock, $.01 par value (the "Common
Stock"). Shares of Series A Preferred Stock are convertible, at the option of
the holder, into shares of the Common Stock as provided in the Certificate of
Designation of the Series A Preferred Stock. The shares of Common Stock (i) into
which the Series A Preferred Stock have been convened and/or (ii) in respect of
which the Warrants have been exercised, are referred to herein as the "Shares".
The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Subscription Agreement.
B. In order to induce Davidson to enter into and perform its obligations
under the Subscription Agreement and the other Transaction Documents (as defined
in the Subscription Agreement), the Company has agreed to provide the
registration rights set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Common Stock" has the meaning set forth in the Recitals.
------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
-----------
or any similar or successor federal statute and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect at the time.
"Holder" means any Person named in Schedule I hereto who executes a
------ ----------
counterpart of this Agreement and any Person who becomes a Holder after the date
of this Agreement pursuant to Paragraph 12(a).
"Indemnified Party" has the meaning set forth in Paragraph 7(c).
-----------------
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 24 OF 39 PAGES
- ---------------------- -------------------
"Indemnifying Party" has the meaning set forth in Paragraph 6(c).
-------------------
"Initiating Group" means one or more holders of Registerable
----------------
Securities which represent in the aggregate a Majority of Registerable
Securities.
"Majority of Registerable Securities" means a majority of Registerable
-----------------------------------
Securities which are outstanding as of the date of this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
----
"Person" means an individual, partnership, corporation, limited
------
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof, or any other entity of any kind.
"Registered Securities" means Registrable Securities which have been
---------------------
registered under the Securities Act pursuant to a registration statement filed
with and declared effective by the SEC.
"Registrable Securities" means (i) the Shares; (ii) the shares of
----------------------
Common Stock issued or issuable as dividends on, or other distributions with
respect to the Shares; and (iii) any other security issued or issuable in
exchange for, or in replacement of, any of the Shares, in each case until any
such security ceases to be a Registrable Security in accordance with Paragraph
2(a) hereof.
"Registration Expenses" means all expenses incident to the Company's
---------------------
performance of or compliance with Paragraphs 3 and 4 of this Agreement,
including without limitation all registration and filing fees, including fees
with respect to filings required to be made with any stock exchange or the NASD,
fees and expenses of compliance with state securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), messenger, telephone and
delivery expenses, and the fees and expenses of counsel for the underwriter,
costs of printing prospectuses, and fees and disbursements of counsel for the
Company and of all independent certified public accountants of the Company
(including the expenses of any special audit and "cold comfort" letters required
by or incident to such performance).
"Registration Statement" means any registration statement of the
----------------------
Company which includes any of the Registrable Securities pursuant to the
provisions of this Agreement, including the prospectus included or deemed
included in the Registration Statement and all amendments and supplements to the
Registration Statement or the prospectus, including post-effective amendments,
and all exhibits to, and all materials incorporated by reference in, the
Registration Statement.
"SEC" means the United States Securities and Exchange Commission or
---
any similar agency then having the authority to enforce the Exchange Act or the
Securities Act.
-2-
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 25 OF 39 PAGES
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"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar or successor statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means all fees and expenses of counsel for the
----------------
Holder(s) and all discounts, commissions or fees of underwriters, selling
brokers, dealer managers or similar securities industry professionals relating
to the distribution of the Registrable Securities.
"Selling Holders" has the meaning set forth in Paragraph 5(b).
---------------
"Series A Preferred Stock" has the meaning set forth in the Recitals.
------------------------
"Shares" has the meaning set forth in the Recitals.
------
"Stockholders" means any holder of equity securities issued by the
------------
Company.
"Warrant" has the meaning set forth in the Recitals.
-------
2. Securities Subject to this Agreement. The securities entitled to the
------------------------------------
benefits of this Agreement are the Registrable Securities, but such benefits
shall continue with respect to each such security only so long as such security
continues to be a Registrable Security. A security ceases to be a Registrable
Security when (i) a Registration Statement covering the sale of such Registrable
Security has been declared effective under the Securities Act and the
Registrable Security has been sold in accordance with the Registration
Statement; (ii) it is distributed to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act; (iii) a new
certificate representing such security has been delivered (to the original
Holder or any subsequent transferee) by the Company free from any restrictive
legend and without issuance of stop transfer or other instructions to the
Company's transfer agent and the Holder of such security has been advised by
counsel acceptable to it that subsequent disposition of such security will not
require registration or qualification under the Securities Act or any state
"blue sky" or similar law then in effect; or (iv) the security has ceased to be
outstanding.
3. Registration under Securities Act: Demand Registration.
-------------------------------------------------------
(a) Demand for Registration. At any time on or after the 270th day
-----------------------
following the issuance to the Holder of one or more Registerable Securities, any
Initiating Group may request in writing that the Company effect the registration
under the Securities Act all or any portion of such Registrable Securities, in
which case the Company will (i) within 30 days of such request, file with the
SEC all documentation necessary to effect such registration and (ii) thereafter
use its reasonable best efforts to effect such registration.
(b) Limitations on Company's Obligation. The Company is obligated to
-----------------------------------
effect two registrations pursuant to this Paragraph 3; and thereafter the
Company shall have no obligation to include any Registrable Securities in any
registration pursuant to this Paragraph 3.
-3-
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 26 OF 39 PAGES
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In the event that a registration requested pursuant to this Paragraph 3 fails to
become effective or if a stop order shall have been issued or the registration
shall have been terminated prior to the sale of the Registrable Securities
(other than as a result of revocation by the Initiating Group), a request for
registration shall be deemed not to have been made for the purposes of this
Paragraph 3.
(c) Underwritten Offer. If an Initiating Group desires to distribute
------------------
Registrable Securities covered by its request by means of an underwriting, it
shall so advise the Company as a part of its request made pursuant to this
Paragraph 3. The Initiating Group shall select an underwriter (which shall be
reasonably acceptable to the Company) for such underwriting and shall together
with the Company enter into an underwriting agreement in customary form with the
underwriter.
4. Registration under the Securities Act; Piggy-Back Registration.
--------------------------------------------------------------
(a) Piggy-Back Registration. If (but without any obligation to do so)
-----------------------
at any time prior to October 31, 2000, the Company proposes to register for
itself or any of its stockholders (other than (1) the Holders and (2) in
connection with any demand registration requested pursuant to the Registration
Rights Agreement, dated October 14, 1993 between the Company and Invemed
Associates, Inc.) any of its capital stock under the Securities Act in
connection with the public offering of such securities on a form and in a manner
that would permit registration of Registrable Securities for sale to the public
under the Securities Act, then:
(i) the Company in each case will notify in writing each Holder
of its intention to effect such a registration at least 30 days prior to the
proposed filing of a Registration Statement in connection therewith;
(ii) the Company will offer each Holder the opportunity to include
in such registration all or such lesser amount of Registrable Securities as each
Holder may request. Upon the request of one or more Holders which in the
aggregate own at least a majority of the outstanding Registrable Securities,
given in writing within 20 days after receipt of the notice described under
clause (i) above, the Company will use its reasonable best efforts as soon as
practicable thereafter to cause any of the Registrable Securities specified by
such Holder to be included in the Registration Statement; and
(iii) if the registration of which the Company gives written notice
under clause (i) above involves an underwriting, the Company shall use its
reasonable best efforts to cause the managing underwriter(s) of the proposed
underwritten offering to permit Holders to include their Registrable Securities
in the underwriting on the same terms and conditions as similar terms of the
Company included therein.
(b) Limitations on Company's Obligations to Effect Additional Piggy-
----------------------------------------------------------------
Back Registration. Notwithstanding the provisions of Paragraph 4(a) above:
- -----------------
-4-
<PAGE>
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CUSIP NO. 450707 10 4 13D PAGE 27 OF 39 PAGES
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(i) the Company shall not be obligated to include Registrable
Securities in more than three Registration Statements pursuant to Paragraph 4(a)
in which Registrable Securities are included and thereafter, the Company shall
have no obligation to include any Registrable Securities in any registration
pursuant to this Paragraph 4; provided, however, in the event that a
-------- -------
registration requested pursuant to Paragraph 4(a) fails to become effective or
if a stop order shall have been issued or the registration shall have been
terminated prior to the sale of the Registrable Securities, or in the event that
the number of Registrable Securities requested to be included in any such
registration is reduced as a result of the operation of Paragraph 4(b)(ii)
(other than as a result of a revocation by a Holder), a request for registration
shall be deemed not to have been made for the purposes of Paragraph 4(a);
(ii) if and to the extent that the managing underwriter(s) advise
the Company in writing that, in its good faith determination, inclusion of the
number of Registrable Securities held by Holders requesting inclusion in the
Registration Statement would materially interfere with the underwriter's ability
to effectuate the registration and sale of securities proposed to be offered and
sold pursuant to the Registration Statement, the managing underwriter(s) shall
select the permissible quantity of Registrable Securities to be sold by the
Holders (which may be none) by reducing the total number of securities to be
sold by the holders of securities other than Registrable Securities and the
Holders (but not the number of securities to be sold by the Company) on a pro
---
rata basis. For purposes of apportionment pursuant to this Paragraph 4(b), for
- ----
any selling Holder that is a partnership or a corporation, the affiliates of
such partnership or shareholder shall collectively, with such Holder be deemed
to be one "selling Holder," and any pro rata reduction with respect to such
"selling Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by entities and individuals included in such "selling
Holder;"
(iii) if, at any time after giving such written notice of its
intention to register any of its securities and prior to the effective date of
the applicable Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to register such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and thereupon shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration; and
(iv) the Company shall not be obligated to effect any registration
of Registrable Securities under Paragraph 4(a) in connection with mergers,
acquisitions, exchange offers, dividend reinvestment plans or stock option plans
or other employee benefit plans; provided, that the securities to be included in
--------
such registration are limited to shares to be issued in such transaction and/or
pursuant to such benefit plans.
(c) Underwritten Offer. If the registration of which the Company gives
------------------
written notice under Paragraph 4(a)(i) above involves an underwriting, the
Company shall so advise in such written notice. In such event the right of any
Holder to registration pursuant to Paragraph 4(a) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in such underwriting. All Holders proposing to distribute
their Registrable Securities through such underwriting shall (together with the
Company and the other holders distributing their Registrable Securities through
such underwriting) enter into an underwriting agreement in customary form with
the underwriter or
-5-
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CUSIP NO. 450707 10 4 13D PAGE 28 OF 39 PAGES
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underwriters selected for such underwriting by the Company. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw from the underwriting by prompt written notice to the Company and the
underwriter.
5. Registration Obligations of the Company. In connection with the filing
---------------------------------------
of a Registration Statement pursuant to Paragraphs 3 or 4, the Company shall:
(a) Use its reasonable best efforts to cause such Registration
Statement to remain in effect until the earlier of (i) the completion of the
distribution of the Registrable Securities included in the Registration
Statement, and (ii) two years after the date on which the Registration Statement
is declared effective.
(b) Notify the Holders whose Registrable Securities are included in
such Registration Statement (the "Selling Holders") as to the filing of the
Registration Statement and of all amendments or supplements thereto filed prior
to the effective date of such Registration Statement;
(c) Notify the Selling Holders, promptly after the Company shall
receive notice thereof, of the time when such Registration Statement became
effective or when any amendment or supplement to any prospectus forming a part
of said Registration Statement has been filed;
(d) Notify the Selling Holders promptly of any request by the SEC for
the amending or supplementing of such Registration Statement or prospectus or
for additional information;
(e) During the period in which the Company is obligated to use its
reasonable best efforts to keep a Registration Statement effective pursuant to
this Paragraph 5, prepare and promptly file with the SEC and promptly notify the
Selling Holders of the filing of any amendments or supplements to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Securities Act, any
event with respect to the Company shall have occurred as a result of which any
such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading; and, in addition, during such
period, prepare and file with the SEC, promptly upon the Selling Holders'
written request, any amendments or supplements to such Registration Statement or
prospectus which may be reasonably necessary or advisable in connection with the
distribution of the Registrable Securities;
(f) Prepare, promptly upon request of the Selling Holders or any
underwriters for the Selling Holders made during the period in which the Company
is obligated to use its reasonable best efforts to keep a Registration Statement
effective, such amendment or amendments to such Registration Statement and such
prospectus or prospectuses as may be
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CUSIP NO. 450707 10 4 13D PAGE 29 OF 39 PAGES
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reasonably necessary to permit compliance with the requirements of Section
10(a)(3) of the Securities Act;
(g) Advise the Selling Holders promptly after the Company shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC
suspending the effectiveness of any such Registration Statement or amendment
thereto or of the initiation or threatening of any proceeding for that purpose,
and promptly use its reasonable best efforts to prevent the issue of any stop
order or obtain its withdrawal promptly if such stop order should be issued;
(h) Use its reasonable best efforts to qualify as soon as reasonably
practicable the Registrable Securities for sale under the securities or blue sky
laws of such states and jurisdictions within the United States as shall be
reasonably requested by the Selling Holders; provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business, to become subject to taxation or to file a consent to service of
process generally in any of the aforesaid states or jurisdictions;
(i) Furnish the Selling Holders, as soon as available, copies of any
Registration Statement and each preliminary or final prospectus, or supplement
or amendment required to be prepared pursuant hereto, all in such quantities as
the Selling Holders may from time to time reasonably request;
(j) Furnish each Selling Holder with copies of such opinions of counsel
and accountants' "comfort" letters as it reasonably may request with respect to
the registration of its Registrable Securities, the Registration Statement
covering such Registrable Securities and the financial statements included
therein; and
(k) Apply for listing and use its reasonable best efforts to list the
Registrable Securities, if any, being registered on any national securities
exchange on which a class of the Company's equity securities is listed (and to
maintain such listing during the pendency of the relevant registration period)
or, if the Company does not have a class of equity securities listed on a
national securities exchange, apply for qualification and use its reasonable
best efforts to qualify the Registrable Securities, if any, being registered for
inclusion on the automated quotation system of the NASD (and to maintain such
qualification during the pendency of the relevant registration period).
6. Expenses. The Company will pay all Registration Expenses in connection
--------
with registrations of Registrable Securities effected pursuant to Paragraphs 3
and 4. All Selling Expenses in connection with any registration effected
pursuant to this Agreement shall be borne by the Company and the holders of the
Registrable Securities so registered, pro rata on the basis of the number of
Shares included in the registration for the account of the Company and the
number of Registrable Securities so registered by each such holder.
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CUSIP NO. 450707 10 4 13D PAGE 30 OF 39 PAGES
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7. Indemnification.
---------------
(a) To the extent permitted by applicable law, the Company will
indemnify each Holder of the Registrable Securities requesting or joining in a
registration, each Person who controls such Holder within the meaning of Section
15 of the Securities Act, and each underwriter of the securities so registered
and each Person who controls such underwriter, and their respective officers,
directors, partners, agents, employees and successors, against all costs,
expenses, demands, claims, losses, damages, liabilities, fines and penalties (or
actions in respect thereof), to which such holder or such other Person may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such claims, losses, damages, liabilities, fines and penalties arise out of
or are based on any untrue statement (or alleged untrue statement) of a material
fact contained in any Registration Statement or prospectus; or arise out of or
are based upon any omission (or alleged omission) to state therein a fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law (other than with respect to violations or alleged violations
caused by the Person seeking indemnification under this Paragraph 7(a)) and will
reimburse each such Holder, each Person who controls such Holder within the
meaning of Section 15 of the Securities Act and each such underwriter, and
their respective officers, directors, partners, agents, employees and successors
for (and will make periodic advances to cover) any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
demand, claim, loss, damage, liability or action promptly after submission of
supporting materials with respect to such expenses; provided, however, that the
-------- -------
Company shall not be required to indemnify any holder or underwriter or Person
which controls any holder or underwriter for any cost, expense, demand, claim,
loss, damage, liability, fine or penalty which arises out of or is based upon
any written information provided by such holder or underwriter, respectively,
expressly for inclusion in the Registration Statement.
(b) To the extent permitted by applicable law, each Holder requesting
or joining in a registration will indemnify the Company, each of its officers,
directors, successors and controlling persons, and each underwriter, if any, of
the Company's securities covered by a registration statement, each Person who
controls the Company or such underwriter within the meaning of Section 15 of the
Exchange Act, and any other Holder selling securities in such registration
statement or any of its directors, officers, partners, agents or employees or
any other person who controls, within the meaning of Section 15 of the Exchange
Act, such Holder against all costs, expenses, demands, claims, losses, damages,
liabilities, fines and penalties (or actions in respect thereof) to which such
indemnified party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities arise out
of or are based upon an untrue statement (or alleged untrue statement) of a
material fact contained in any Registration Statement or prospectus, or arise
out of or are based upon the omission (or alleged omission) to state therein a
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
was
-8-
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CUSIP NO. 450707 10 4 13D PAGE 31 OF 39 PAGES
- ---------------------- -------------------
made in any Registration Statement or prospectus in reliance upon and in
conformity with written information furnished to the Company by such Holder
requesting or joining in a registration specifically for use in the preparation
thereof.
(c) Each party entitled to indemnification under this Paragraph 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has received written notice of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided such counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld or delayed). The Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnifying Party
shall bear the expense of such defense of the Indemnified Party if (i) the
Indemnifying Party has agreed in writing to pay such expenses, (ii) the
Indemnifying Party shall have failed to assume the defense of such claim or
employ counsel reasonably satisfactory to the Indemnified Party, or (iii) in the
reasonable judgment of the Indemnified Party, based upon the written advice of
such indemnified Party's counsel, representation of both parties by the same
counsel would be inappropriate due to actual or potential conflicts of interest.
In the event that the Indemnifying Party properly does not assume such defense,
the Indemnifying Party shall not be subject to any liability for any settlement
made without its prior written consent, which consent shall not be unreasonably
withheld or delayed. The failure of any Indemnified Party to give notice as
provided herein shall relieve the Indemnifying Party of its obligations under
this Paragraph 7 only to the extent that such failure to give notice shall
materially adversely prejudice the Indemnifying Party in the defense of any such
claim or any such litigation. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the prior written consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation in form and substance reasonably
satisfactory to such Indemnified Party.
8. Contribution.
------------
(a) If the indemnification provided for in Paragraph 7 from the
Indemnifying Party is unavailable to or unenforceable by the Indemnified Party
in respect to any losses, claims, damages, liabilities or expenses referred to
herein, then the 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 Indemnifying
Party and Indemnified Parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Parties 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
-9-
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CUSIP NO. 450707 10 4 13D PAGE 32 OF 39 PAGES
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been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. 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 Paragraph 7, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(b) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Paragraph 8 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. 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.
(c) If indemnification is available under Paragraph 7, the Indemnifying
Parties shall indemnify each Indemnified Party to the full extent provided in
Paragraph 7 without regard to the relative fault of the Indemnifying Party or
Indemnified Party or any other equitable consideration provided for in this
Paragraph 8.
9. Hold-Back Agreements.
--------------------
(a) Restrictions on Public Sale by Holder of Registrable Securities.
---------------------------------------------------------------
To the extent consistent with applicable law, each holder of Registrable
Securities whose Registrable Securities are included in a Registration Statement
filed pursuant to Paragraphs 3 and 4 hereof agrees not to effect any public sale
or distribution of the issue being registered or any similar security of the
Company, including a sale pursuant to Rule 144 or Rule 144A under the Securities
Act, during the 7-day period prior to, and during the 90-day period (or such
longer period as is required by the managing underwriter with respect to the
applicable Registration Statement) beginning on, the effective date of such
Registration Statement, to the extent such sales may prevent the Company from
being in compliance with the Exchange Act; provided, however, that no such
restriction shall apply to sales of Registrable Securities made pursuant to that
Registration Statement, which may be made at any time following the effective
date of that Registration Statement.
(b) Restrictions on Public Sale by the Company and Others. The Company
-----------------------------------------------------
shall not effect any public or nonpublic sale or distribution of any securities
similar to those being registered, or any securities convertible into or
exchangeable or exercisable for any such securities or similar securities,
during the 7-day period prior to, and during the 90-day period beginning on, the
effective date of any Registration Statement in which holders of Registrable
Securities are participating or the commencement of a public distribution of
Registrable Securities pursuant to any such Registration Statement (except (i)
as part of such registration or pursuant to registrations on SEC Forms S-4 or S-
8 or any similar or successor form, or on any form filed in connection with an
exchange offer or an offering of securities solely to the existing
-10-
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CUSIP NO. 450707 10 4 13D PAGE 33 OF 39 PAGES
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stockholders or employees of the Company or (ii) for sales or other issuances of
securities pursuant to outstanding options, warrants, rights or similar
obligations).
10. Rule 144 and Stock Exchange Listings.
------------------------------------
To the extent that the Company is subject to the filing and reporting
requirements of the Securities Act and the Exchange Act, and so long as there
are Registrable Securities outstanding:
(a) The Company will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, and will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 or Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. 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 such information and requirements.
(b) The Company will use its reasonable best efforts to avoid taking
any action which would cause the Common Stock to cease to be eligible for
inclusion on either of the NASD Automated Quotation System or for listing on any
securities exchange on which it may become listed.
11. Obligations of Holder.
---------------------
(a) Each Holder of Registrable Securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
(b) Each Holder of the Registrable Securities agrees by acquisition of
such Registered Securities that upon receipt of any notice from the Company
pursuant to Paragraph 5(g), such Holder will forthwith discontinue such Holder's
disposition of Registered Securities pursuant to the Registration Statement
relating to such Registered Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Paragraph 5(g) and if
so directed by the Company, 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 relating to such Registered Securities at the time
of receipt of such notice.
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CUSIP NO. 450707 10 4 13D PAGE 34 OF 39 PAGES
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12. Miscellaneous.
-------------
(a) Transfer of Certain Rights. The rights granted to the Holders under
--------------------------
this Agreement may be transferred only to a transferee who delivers to the
Company, within a reasonable time after such transfer, a written instrument by
which such transferee agrees to be bound by the applicable terms of this
Agreement. Notwithstanding the foregoing, nothing herein shall prohibit: (i) any
Holder from transferring any of its rights under this Agreement to any wholly-
owned subsidiary of such Holder or to any entity which merges or consolidates
with or acquires all or substantially all of the equity securities or assets of
such Holder, (ii) any Holder which is a partnership from transferring any of its
rights under this Agreement to a partner of such partnership where such partner
receives Registrable Securities in a distribution from such partnership, (iii)
any Holder who is an individual from transferring any of its rights under this
Agreement to such Holder's spouse or to other relatives, or to a trust for the
benefit of the Holder, or his or her spouse or other relatives; or (iv) any
trustee of a trust which holds Registerable Securities from distributing such
Registrable Securities to the beneficiaries of such trusts; provided that any
--------
such transferee under subparagraphs (i), (ii), (iii) or (iv) above will hold the
Registrable Securities subject to the terms and conditions of this Agreement and
the applicable Stockholders Agreements. Upon any transfer of the rights of a
Holder permitted by and completed in compliance, with the terms of this
Agreement, the transferee shall become a "Holder" for purposes of this Agreement
and the Company shall add the name and address of the transferee to Schedule I
----------
(and, to the extent the transferor no longer holds Registrable Securities, shall
delete the name and address of the transferor).
(b) Remedies. In the event of a breach by the Company of its
--------
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(c) Amendments and Waivers. The provisions of this Agreement may not be
----------------------
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of the
Company and Holders of at least a majority of the Registrable Securities
affected by such amendment, modification, supplementation, waiver or consent.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and which 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 by such Holders,
provided that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
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CUSIP NO. 450707 10 4 13D PAGE 35 OF 39 PAGES
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(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing and shall be delivered by hand,
overnight courier service, registered or certified first-class mail, return
receipt requested, or telecopier; if to a Holder, at the address set forth
opposite such Holder's name on Schedule I attached hereto or such other address
----------
as may have been furnished to the Company in writing; if to the Company, at 7500
Flying Cloud Drive, Minneapolis, Minnesota 55344-3739 and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Paragraph 12(d).
All such notices and communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; one business day
after sent if sent by courier service.
(e) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Minnesota without regard to the
conflict of laws provisions thereof.
(f) 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.
(g) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement and the Subscription Agreement
----------------
(and all exhibits and/or schedules attached hereto and thereto) 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 or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the securities now or hereafter owned by the Holders.
(j) Attorneys' Fees. In any action or proceeding brought to enforce any
---------------
provision of this Agreement, or where any provision hereof or thereof is validly
asserted as a defense, the successful party shall be entitled to recover, and
the court shall award, reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
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CUSIP NO. 450707 10 4 13D PAGE 36 OF 39 PAGES
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as
of the date first above written.
THE COMPANY:
-----------
IVI PUBLISHING, INC., a Minnesota Corporation
By: /s/ Thomas P. Skiba
-----------------------------------------
Title: VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
THE HOLDER(S):
-------------
DAVIDSON & ASSOCIATES, INC.
By: /s/ J.R. Allewaert
-----------------------------------------
Title: CHIEF FINANCIAL OFFICER
14
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CUSIP NO. 450707 10 4 13D PAGE 37 OF 39 PAGES
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SCHEDULE I
to
Registration Rights Agreement
of
IVI Publishing, Inc.
--------------------
Holder Address:
------ -------
DAVIDSON & ASSOCIATES, INC. 19840 Pioneer Avenue
Torrance California 90503
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CUSIP NO. 450707 10 4 13D PAGE 38 OF 39 PAGES
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SCHEDULE A
----------
CONTROL PERSONS, EXECUTIVE OFFICERS AND DIRECTORS
-------------------------------------------------
The following information sets forth the name, business address and present
principal occupation or employment of CUC International Inc., a Delaware
corporation ("CUC") and the control person of Davidson, and each director and
executive officer of Davidson and CUC. The business address of CUC is 707 Summer
Street, Stamford, Connecticut 06901, and the business address of each person
named below is the address of the company for whom such person is a director or
an executive officer, as the case may be, as set forth in this Schedule 13D. To
the best of Davidson's knowledge, during the last five years, none of such
persons has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or State securities laws or finding any violation with respect to such laws.
Each of such persons is a citizen of the United States of America.
CUC INTERNATIONAL INC.
DIRECTORS OF CUC INTERNATIONAL INC.
BARTLETT BURNAP, independent investor; President of the Ralph J. Weiler
Foundation; President of CIB Associates.
WALTER A. FORBES, Chairman of the Board of Directors and Chief Executive
Officer; Director of NFO Research, Inc.
ROBERT P. RITTEREISER, Chairman of the Board of Directors and Chief
Executive Officer of Gruntal Financial Corp.; Chairman of Yorkville Associates
Corp.; Director of Ferrofluidics Corporation, Interchange Financial Services
Corp. and Wallace Computer Services, Inc.
T. BARNES DONNELLEY, independent investor.
STEPHEN A. GREYSER, Professor of marketing/communications at the Harvard
Business School; Director of Edelman Worldwide and Opinion Research Corporation.
CHRISTOPHER K. MCLEOD, Executive Vice President and a member of the Office
of the President; Chief Executive Officer of CUC Software.
BURTON C. PERFIT, retired Senior Vice President of Jack Eckerd Corporation.
STANLEY M. RUMBOUGH, JR., independent investor; Director of International
Flavors and Fragrances, Inc.
E. KIRK SHELTON, President and Chief Operating Officer.
16
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CUSIP NO. 450707 10 4 13D PAGE 39 OF 39 PAGES
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KENNETH A. WILLIAMS, Vice Chairman of the Board of Directors; member of the
Office of the President; Chief Executive Officer of Sierra-On-Line, Inc., a
wholly owned subsidiary of CUC.
EXECUTIVE OFFICERS OF CUC INTERNATIONAL INC.
WALTER A. FORBES, see above.
---------
E. KIRK SHELTON, see above.
---------
CHRISTOPHER K. MCLEOD, see above.
---------
COSMO CORIGLIANO, Senior Vice President and Chief Financial Officer.
AMY N. LIPTON, Senior Vice President and General Counsel.
DAVIDSON & ASSOCIATES, INC.
DIRECTORS OF DAVIDSON & ASSOCIATES, INC.
CHRISTOPHER K. MCLEOD, see above.
---------
JACQUES R. ALLEWAERT, Chief Financial Officer.
COSMO CORIGLIANO, see above.
---------
CASPER SABATINO, Vice President of Financial Reporting.
LAWRENCE S. GROSS, President.
EXECUTIVE OFFICERS OF DAVID & ASSOCIATES, INC.
LAWRENCE S. GROSS, see above.
---------
JACQUES R. ALLEWAERT, see above.
---------
PAULA V. DUFFY, Vice President, General Counsel and Secretary.
17
