EXHIBIT 10.68
REGISTRATION RIGHTS AGREEMENT
June 16, 1998
To each of the several Shareholders named in
Schedule I hereto
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Dear Gentlemen:
This will confirm that in consideration of the provisions contained in the
Agreement and Plan of Merger dated June 16, 1998 (the "Merger Agreement"), among
CMG Information Services, Inc. (the "Buyer"), InSolutions Incorporated and CMG-
InSolutions Merger Corporation ("Merger Sub"), the Buyer covenants and agrees
with each of you as follows:
A. Certain Definitions. As used in this Agreement, the following terms shall
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have the following meanings:
"Commission" shall mean the Securities and Exchange Commission, or any other
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federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $.01 par value, of the Buyer, as
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constituted as of the date of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or
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any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Lock-up" shall mean the Investment Representation and Lock-Up Agreement
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delivered to the Buyer by each of the Shareholders named in Schedule I hereto
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pursuant to the Merger Agreement.
"Merger Shares" shall mean the Common Stock issued pursuant to the Merger
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Agreement.
"Registration Expenses" shall mean the expenses so described in Section 6.
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"Restricted Stock" shall mean the Merger Shares, excluding Merger Shares which
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have been (a) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (b) sold pursuant to Rule 144 under the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
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similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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"Selling Expenses" shall mean the expenses so described in Section 6.
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.2. Required Registration.
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(a) The Buyer will use its reasonable best efforts to cause to be declared
effective one registration statement on Form S-3 or any successor thereto
(or in the event the Buyer is not eligible to use Form S-3 or such
successor form, Form S-1 or any other form then available for such purpose)
following the date which is twelve months after the date hereof. Forty-
five days prior to such date, the Buyer shall send a Notice of Registration
Statement and Selling Securityholder Questionnaire to each individual or
entity which holds Restricted Stock which, as a result of such twelve month
date referenced above, will no longer be subject to the "Lock-Up" described
in the Investment Representation and Lock-Up Agreement executed on the date
hereof. To be included on such registration statement, a holder must
return a completed Notice of Registration Statement and Selling
Securityholder Questionnaire within fifteen days of the date of the Notice
of Registration Statement and Selling Securityholder Questionnaire. If
after expiration of such fifteen day period, the holders of Restricted
Stock have not indicated a desire to have eligible shares with an aggregate
price to the public of at least $600,000 included in the registration
statement, the Buyer shall not be required to file a registration statement
at such time. If holders of Restricted Stock have indicated a desire to
have eligible shares with an aggregate price to the public of at least
$600,000 included in the registration statement, the Buyer shall as
promptly as practicable file a registration statement covering such shares
and shall use its reasonable best efforts to have such registration
statement declared effective.
(b) If holders of a majority of the Restricted Stock to be registered request
that the intended method of disposition be an underwritten public offering,
the holders of a majority of the shares of Restricted Stock to be sold in
such offering shall designate the managing underwriter of such offering,
subject to the approval of the Buyer, which approval shall not be
unreasonably withheld.
(c) The Buyer shall be entitled to include in any registration statement
referred to in this Section 2 shares of Common Stock to be sold by the
Buyer for its own account, except as and to the extent that such method of
disposition is an underwritten public offering and in the opinion of the
managing underwriter such inclusion would adversely affect the marketing of
the Restricted Stock to be sold.
(d) The Buyer's obligation to file a registration statement or cause such
registration statement to become effective shall be suspended for up to 30
days if there exists at the time material non-public information relating
to the Buyer which the Buyer determines in good faith would interfere with
or affect the negotiation or completion of a contemplated transaction
(whether or not a final decision has been made to undertake such
transaction) or involve initial or continuing disclosure obligations that
are not in the best interest of the Buyer.
(e) The Buyer shall be obligated to keep a registration statement filed
pursuant to Section 2(a) effective until the earliest of (i) the sale of
all of the shares included thereunder, (ii) the agreement by the holders of
such shares to terminate the registration, (iii) each holder of such shares
becoming eligible, under Rule 144 under the Securities Act, to make
unregistered sales in a three-month period of all its shares included on
such registration statement
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or (iv) the registration rights of the holders of such shares have
terminated hereunder. At such time, the Buyer may file a post-effective
amendment to such registration statement removing from registration the
shares included in such registration statement.
.3. Incidental Registration. If the Buyer at any time (other than pursuant to
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Section 2) proposes to register any of its Common Stock under the Securities Act
for sale to the public (except with respect to registration statements on Forms
S-4, S-8 or another form not available for registering the Restricted Stock for
sale to the public), it shall give written notice to all holders of outstanding
Restricted Stock of its intention so to do. Upon the written request of any such
holder, received by the Buyer within 30 days after the giving of any such notice
by the Buyer, to register any of its Restricted Stock which has been released
from its respective Lock-Up (which request shall state the intended method of
disposition thereof), the Buyer will use its reasonable commercial efforts to
cause the Restricted Stock as to which registration shall have been so requested
to be included in the securities to be covered by the registration statement
proposed to be filed by the Buyer. In the event that any registration pursuant
to this Section 3 shall be, in whole or in part, an underwritten public offering
of Common Stock, the number of shares of Restricted Stock to be included in such
an underwriting may be reduced (pro rata among the requesting holders based upon
the number of shares of Restricted Stock owned by such holders) if and to the
extent that the managing underwriter or underwriters shall be of the opinion
that such inclusion would adversely affect the marketing of the securities to be
sold by the Buyer. Notwithstanding the foregoing provisions, the Buyer may
elect not to file, withdraw or file a post-effective amendment terminating any
registration statement referred to in this Section 3 without thereby incurring
any liability to the holders of Restricted Stock.
.4. Registration Procedures. If the Buyer is required by the provisions of
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Sections 2 or 3 to file a registration statement covering shares of Restricted
Stock, the Buyer agrees to:
(a) subject to the provisions of Sections 2 and 3, prepare and file with the
Commission such registration statement including such securities and use
reasonable commercial efforts to cause such registration statement to
become effective;
(b) subject to the provision of Section 4(a), prepare and file with the
Commission such amendments and supplements to such registration statement
and the prospectus included therein as may be necessary to keep such
registration statement effective for the period of distribution set forth
herein, and comply with the provisions of the Securities Act;
(c) use reasonable efforts to prevent the issuance of any stop order or other
order suspending the effectiveness of such registration statement and, if
such an order is issued, to obtain the withdrawal thereof at the earliest
possible time and to notify each holder of Restricted Stock included in
such registration statement of such order and its withdrawal;
(d) furnish to each seller of Restricted Stock such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus) as such persons reasonably may request in order to
comply with the requirements of the Securities Act;
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(e) notify the holders of Restricted Stock included in the registration
statement upon the occurrence of any event as a result of which the
prospectus included in such registration statement, as then in effect,
contains an untrue statement of material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and as
promptly as practicable, prepare, file and furnish to such holders a
reasonable number of copies of a supplement or an amendment to such
prospectus as may be necessary so that such prospectus does not contain an
untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing; provided, however,
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that the Buyer may delay preparing, filing and distributing any such
supplement or amendment if the Buyer determines in good faith that such
supplement or amendment might, in the reasonable judgment of the Buyer, (i)
interfere with or affect the negotiation or completion of a transaction
that is being contemplated by the Buyer (whether or not a final decision
has been made to undertake such transaction) or (ii) involve initial or
continuing disclosure obligations that are not in the best interests of the
Buyer's stockholders at such time; provided, further, that (x) the Buyer
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shall give notice (a "Standstill Notice") of any such delay, (y) such delay
shall not extend for a period of more than thirty (30) days without the
written consent of the holders of a majority of the Registered Stock
requested to be included in such registration statement and (z) the Buyer
shall not exercise such right more than twice during any twelve-month
period.
(f) if required, use reasonable efforts to register or qualify the Restricted
Stock covered by such registration statement under the securities or "blue
sky" laws of such United States jurisdictions as the sellers of Restricted
Stock or, in the case of an underwritten public offering, the managing
underwriter or underwriters reasonably shall request, provided, however,
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that the Buyer shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in
any such jurisdiction;
(g) use reasonable efforts to include the Restricted Stock covered by such
registration statement on the Nasdaq National Market or any securities
exchange on which the Common Stock of the Buyer is then listed; and
(h) in the event of an underwritten public offering of the Restricted
Securities, enter into and perform its obligations under an underwriting
agreement, in usual and customary form reasonably acceptable to the Buyer,
with the managing underwriter of such offering.
.5. Obligations of Holder. In connection with the registration of the
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Restricted Stock pursuant to a registration statement, each holder of shares of
Restricted Stock included thereon shall:
(a) furnish to the Buyer such information regarding itself and the intended
method of disposition as necessary to assure compliance with federal and
applicable state securities laws or as the Buyer shall reasonably request;
(b) upon receipt of any notice from the Buyer of the happening of any event of
the kind described in Section 4(c), immediately discontinue disposition of
Restricted Stock pursuant to the registration statement until withdrawal of
the stop order referred to in Section 4(c); and
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(c) not sell or otherwise transfer any Restricted Stock during the period from
the date specified in the Standstill Notice given by the Buyer pursuant to
Section 4(e) above that the Buyer has determined that it will delay the
preparation and filing of an amendment or supplement to the prospectus
included in the registration statement until the expiration date specified
in such notice.
.6. Expenses. All expenses incurred by the Buyer in complying with Sections
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2, 3 or 4, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Buyer, fees and expenses incurred in connection with
complying with state securities or "blue sky" laws, fees payable to the National
Association of Securities Dealers, Inc., fees payable to any securities exchange
or over-the-counter market quotation system (e.g. Nasdaq National Market
System), and fees of transfer agents and registrars, but excluding any Selling
Expenses, are called "Registration Expenses." All underwriting discounts and
selling commissions, fees of counsel and other advisors to sellers of Restricted
Stock and transfer and similar taxes are called "Selling Expenses."
The Buyer shall pay all Registration Expenses. All Selling Expenses shall be
borne by the participating sellers.
.7. Indemnification. In the event that any Restricted Stock is included in a
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registration statement under this Agreement:
(a) to the extent permitted by law, the Buyer shall indemnify and hold harmless
each selling stockholder against any losses, claims, damages, liabilities
or reasonable out-of-pocket expenses (whether joint or
several)(collectively, including legal or other expenses reasonably
incurred in connection with investigating or defending same, "Losses"),
insofar as any such Losses arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Buyer will reimburse such stockholders for any
legal or other expenses as reasonably incurred by any such stockholder in
connection with investigating or defending any Loss; provided, however,
that the foregoing indemnity shall not apply to amounts paid in settlement
of any Loss if such settlement is effected without the consent of the Buyer
(which consent shall not be unreasonably withheld), nor shall the Buyer be
obligated to indemnify any person for any Loss to the extent that such Loss
arises out of or is based upon and in conformity with information furnished
by such person specifically for use in such registration statement; and
provided, further, that the Buyer shall not be required to indemnify any
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person to the extent that any Loss results from such person selling Common
Stock (i) to a person to whom there was not sent or given, at or prior to
the written confirmation of the sale of such shares, a copy of the
prospectus, as most recently amended or supplemented, if the Buyer has
previously furnished or made available copies thereof or (ii) following
written notice by the Buyer of an event described in Section 4(c) or 4(e).
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(b) to the extent permitted by law, each selling stockholder agrees to
indemnify and hold harmless the Buyer, the officers, directors, employees,
agents and representatives of the Buyer, and each person, if any, who
controls the Buyer within the meaning of the Securities Act or the Exchange
Act, against any Losses to the extent that any such Losses arise out of or
are based upon and in conformity with information furnished by such
stockholder specifically for use in such registration statement; and such
selling stockholder agrees to reimburse any legal or other expenses as
reasonably incurred by the Buyer and any such officer, director, employee,
agent, representative, or controlling person, in connection with
investigating or defending any such Loss; provided, however, that the
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foregoing indemnity shall not apply to amounts paid in settlement of any
such Loss if such settlement is effected without the consent of such
stockholder, which consent shall not be unreasonably withheld; provided,
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further, that, in no event shall any indemnity under this subsection 7(b)
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exceed the sales price of the Restricted Stock sold by such stockholder
under the registration statement; and
(c) promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section 7, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in and to assume the
defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain
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its own counsel, with the reasonably incurred fees and expenses of one such
counsel to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would
be inappropriate under applicable standards of professional conduct due to
actual or potential conflicting interests between such indemnified party
and any other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a
reasonable time after the commencement of any such action, shall not
relieve such indemnifying party of any liability to the indemnified party
under this Section 7 with respect to such action unless and only to the
extent prejudicial to its ability to defend such action, and the omission
so to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than
under this Section 7 of with respect to any other action.
.8. SEC Reporting. With a view to making available to the holders of
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Restricted Stock the benefits of certain rules and regulations of the Commission
which may permit the sale of the Restricted Securities to the public without
registration, the Buyer agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are understood
and defined in Commission Rule 144 or any similar or analogous rule
promulgated under the Securities Act;
(b) File with the Commission, in a timely manner, all reports and other
documents required of the Buyer under the Exchange Act;
(c) So long as the holders own any Restricted Stock, furnish to the holders
forthwith upon request: a written statement by the Buyer as to its
compliance with the reporting requirements of said Rule 144 under the
Securities Act, and of the Exchange Act, a copy of the
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most recent annual or quarterly report of the Buyer; and such other reports
and documents as a holder of Restricted Stock may reasonably request in
availing itself of any rule or regulation of the Commission allowing it to
sell any such securities without registration.
.9. Miscellaneous.
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(a) Any notice or other communication required or permitted hereunder shall be
in writing and shall be deemed given when so delivered in person, by
overnight courier, by facsimile transmission (with receipt confirmed by
telephone or by automatic transmission report) or two business days after
being sent by registered or certified mail (postage prepaid, return receipt
requested), as follows:
(i) if to the Buyer, to:
CMG Information Services, Inc.
100 Brickstone Square, 1st Floor
Andover, MA 01810
Attention: Chief Financial Officer
Telephone: 781-684-3660
Facsimile: 781-684-3172
with a copy to:
Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108-3190
Attention: William Williams II
Telephone: 617-573-0100
Facsimile: 617-227-4420
(ii) if to a current holder of Restricted Stock, to:
InSolutions Incorporated
2940 Kifer Road
Santa Clara, CA 95051
Attention: President
Telephone: 408-986-6344
Facsimile: 408-986-6344
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with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Christopher J. Ozburn
Telephone: 650-493-9300
Facsimile: 650-493-6811
(iii) if to any subsequent holder of Restricted Stock, at the address that
has been furnished to the Buyer in writing, or, in any case, at such other
address or addresses as shall have been furnished in writing to the Buyer (in
the case of a holder of Restricted Stock) or to the holders of Restricted Stock
(in the case of the Buyer) in accordance with the provisions of this paragraph.
(b) This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to choice of law provisions.
(c) This Agreement may not be amended or modified, and no provision hereof may
be waived, without the written consent of the Buyer and the holders of at
least a majority of the outstanding shares of Restricted Stock.
(d) This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
(e) The obligations of the Buyer to register shares of Restricted Stock, or to
keep a registration statement including shares of Restricted Stock
effective, under Sections 2 or 3 shall terminate with respect to each
holder upon such time as all of the holder's Merger Shares are eligible for
sale during a single three month period under Rule 144.
(f) The rights hereunder of the holder may be assigned to a transferee of the
Restricted Stock as long as: (i) the Buyer is, within thirty (30) days
following such transfer, furnished with written notice of the name and
address of such transferee, (ii) immediately following such transfer, the
further disposition of Restricted Stock is restricted under the Securities
Act, (iii) the transferee agrees in writing with the Buyer to be bound by
all of the provisions hereof and (iv) such transfer is made in accordance
with the applicable requirements of the Lock-Up. No rights under this
Agreement shall be assigned to any person or entity to whom less than all
of the Restricted Stock held by transferor are transferred, unless such
transfer is made in connection with distributions without consideration,
such as by a partnership to its partners.
(g) If any provision of this Agreement shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement,
and this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
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Please indicate your acceptance of the foregoing by signing and returning the
enclosed counterpart of this letter, whereupon this Agreement shall be a binding
agreement between the Buyer and you.
CMG INFORMATION SERVICES, INC.
By
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Name: Andrew J. Hajducky III
Title: Chief Financial Officer
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AGREED TO AND ACCEPTED as of the date first above written.
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(Name of Shareholder)
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(Signature)
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(Print Name)
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(Title, if applicable)
Shareholder's Address for Notice:
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SCHEDULE I
Robert F. Lee
Sam L. Williams
K&G Consulting, Inc.
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