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401CMM4681/25.365624_5--Individual / ClariNet Registration Rts. Agt.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
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into as of June 18, 1997 by and among Individual, Inc., a Delaware corporation
("INDIVIDUAL" or the "COMPANY"), all of the shareholders of ClariNet
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Communications Corp., a California corporation ("CLARINET") listed on the
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signature pages hereto (collectively, the "SHAREHOLDERS" and individually a
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"SHAREHOLDER") and Broadview Associates ("BROADVIEW"). Subject to Section
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13.6, Broadview shall be deemed to be a "Shareholder" for all purposes
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hereunder.
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RECITALS
A. The Company, CN Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Individual (the "PURCHASER"), ClariNet, and certain
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of the Shareholders are parties to an Agreement and Plan of Reorganization
(the "MERGER AGREEMENT") dated as of June 13, 1997 pursuant to which
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Individual will acquire ClariNet through a merger of Purchaser with and into
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ClariNet in which shares of Common Stock of Individual, $.01 par value per
share (the "INDIVIDUAL COMMON STOCK"), will be issued to the Shareholders in
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exchange for their shares in ClariNet as set forth in the Merger Agreement.
Broadview is receiving shares of Individual Common Stock pursuant to the Fee
Payment Agreement dated as of June 13, 1997 among Individual, ClariNet and
Broadview (the "FEE PAYMENT AGREEMENT"), subject to the terms and conditions
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set forth therein.
B. The execution and delivery of this Agreement by the parties hereto
is a condition precedent to the obligations of the parties under the Merger
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
indicted below:
1933 ACT. The Securities Act of 1933, as amended, and the rules and
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regulations promulgated thereunder, as in effect from time to time
1934 ACT. The Securities Exchange Act of 1934, as amended, and the rules and
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regulations promulgated thereunder, as in effect from time to time.
BUSINESS DAY. Each weekday that is not a day on which banking institutions in
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New York are authorized or obligated by law or executive order to close.
COMMISSION. The United States Securities and Exchange Commission.
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HOLDER. Any person owning Registrable Securities who is a party to this
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Agreement, and any authorized transferee thereof in accordance with Section 11
of this Agreement.
PROSPECTUS. The prospectus included in any Registration Statement, as
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amended or supplemented by any prospectus supplement (including, without
limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
REGISTER, REGISTRATION AND REGISTERED. A registration effected by
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preparing and filing with the Commission a registration statement or similar
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document in compliance with the 1933 Act, and the declaration or ordering of
effectiveness of such Registration Statement or document.
REGISTRABLE SECURITIES. The shares of Individual Common Stock issued to
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the Shareholders pursuant to the Merger Agreement and to Broadview pursuant to
the Fee Payment Agreement (subject to Section 13.6), or issued pursuant to the
exercise of ClariNet stock options assumed by Individual pursuant to the
Merger Agreement and any securities that may be issued by the Company or any
successor to the Company from time to time with respect to, in exchange for,
or in replacement of such shares of Individual Common Stock, including,
without limitation, securities issued as a stock dividend on or pursuant to a
stock split of such shares of Individual Common Stock; provided, however, that
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those shares as to which the following apply shall cease to be Registrable
Securities: (a) a registration statement with respect to the sale of such
Registrable Securities shall have become effective under the 1933 Act and such
Registrable Securities shall have been disposed of under such registration
statement; (b) such Registrable Securities shall have become transferable, or
have become eligible and remain eligible for transfer (whether or not so
transferred), in accordance with Rule 144(k), or any successor rule or
provision, under the 1933 Act; (c) such Registrable Securities shall have been
transferred in a transaction in which the Holder's rights and obligations
under this Agreement were not assigned in accordance with this Agreement; or
(d) such Registrable Securities shall have ceased to be outstanding.
REGISTRATION EXPENSES. All expenses incident to the Company's
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performance of or compliance with Sections 2 and 3 hereof, including, without
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limitation, all registration and filing fees (including filing fees with
respect to the Commission and to the National Association of Securities
Dealers, Inc. and listing fees of the Nasdaq National Market System), all fees
and expenses of complying with state securities or "blue sky" laws (including
fees and disbursements of underwriters' counsel in connection with any "blue
sky" memorandum or survey and any fees and expenses for foreign qualification
in such jurisdictions), all printing expenses, all registrars' and transfer
agents' fees and all fees and disbursements of the Company's counsel, one
counsel to the holders of Registrable Securities as a group, and independent
public accountants; provided, however, that Registration Expenses shall not
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include the fees and expenses of more than one counsel to the holders of
Registrable Securities, or underwriters' discounts or commissions associated
with the sale of the Registrable Securities.
REGISTRATION STATEMENT. A Registration Statement prepared and filed with
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the Commission in compliance with the 1933 Act.
SELLER. Any person, including any Holder, participating in an offering of any
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Registrable Securities of the Company pursuant to this Agreement.
SELLING EXPENSES. All applicable transfer taxes and any fees and
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disbursements of more than one counsel or any accountants or other advisors
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for the Sellers of the Registrable Securities being registered.
2. "PIGGY-BACK" REGISTRATION RIGHTS
If at any time Individual shall determine to register in a public
offering under the 1933 Act any of its Common Stock for its own account, or
the account of other shareholders of the Company desiring to sell "restricted
securities" of the Company (as defined in Rule 144 of the 1933 Act), it shall
send to the Holders written notice of such determination and, if within 15
calendar days after receipt of such notice, any Holder shall so request in
writing, Individual shall include in such Registration Statement all or any
part of the Registrable Securities the Holder requests to be registered. This
right shall not apply to a registration of shares of Individual Common Stock
on Form S-8 or Form S-4 (or their then equivalents) relating to shares of
Individual Common Stock to be issued by Individual in connection with any
acquisition of any entity or business, or shares of Individual Common Stock
issuable in connection with any stock option, stock purchase plan or other
employee benefit plan.
If, in connection with any offering involving an underwriting of
Individual Common Stock to be issued for the account of the Company or selling
securityholders, the managing underwriter shall impose a limitation on the
number of shares of such Individual Common Stock which may be included in any
such Registration Statement because, in its judgment, such limitation is
necessary to effect an orderly public distribution of the Individual Common
Stock and/or to maintain a stable market for the securities of the Company,
then the Company shall be obligated to include in such Registration Statement
only such limited portion of the stock with respect to which the Holder has
requested inclusion hereunder as the underwriters determine is necessary or
appropriate for effecting an orderly public distribution of the Individual
Common Stock and/or maintaining a stable market for the securities of the
Company; provided, however, that in no event shall any Holder be subject to
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any such limitation unless all selling securityholders, other than the
Company, are subject to the same limitation.
3. SHELF REGISTRATION
3.1 UNDERTAKING TO REGISTER
Individual will use its best efforts to prepare and file a Registration
Statement under the Securities Act as soon as reasonably practicable following
the Effective Time (as that term is defined in the Merger Agreement), and will
use reasonable best efforts to cause such Registration Statement to become
effective not later than October 15, 1997, to register all of the Registrable
Securities for resale in the public market in brokerage transactions or
transactions with market makers, in block trades, and in privately negotiated
transactions.
3.2 SELLING PROCEDURES; SUSPENSION
(a) Except in the event that paragraph (b) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file from
time-to-time with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other required document so that such Registration Statement will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and so that, as thereafter delivered to purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state 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; (ii)
provide the Holders of the Registrable Securities copies of any documents
filed pursuant to Section 3.2(a)(i); and (iii) inform each Holder that the
Company has complied with its obligations in Section 3.2(a)(i) (or that, if
the Company has filed a post-effective amendment to the Registration Statement
which has not yet been declared effective, the Company will notify each such
Holder to that effect, will use its best efforts to secure the effectiveness
of such post-effective amendment and will promptly notify each such Holder
pursuant to Section 3.2(a)(i) hereof when the amendment has become effective).
(b) In the event (i) of any request by the Commission or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (ii) of the
issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose; (iii) of the
receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; (iv) of any event or circumstance which
necessitates the making of any changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated therein
by reference, so that, in the Registration Statement, it will not contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; or
(v) that, in the good faith judgment of the Company's Board of Directors, upon
the advice of counsel, (A) the offering of securities pursuant thereto would
materially and adversely affect (i) a pending or scheduled public offering or
material (in the judgment of the Company's Board of Directors) private
placement of Individual's securities, (ii) a pending or proposed material (in
the judgment of the Company's Board of Directors) acquisition, merger,
consolidation, reorganization, restructuring or similar transaction of or by
Individual, (iii) bona fide negotiations, discussions or proposals with
respect to any of the foregoing, or (iv) the position or strategy of
Individual in connection with any material (in the judgment of the Company's
Board of Directors) pending or threatened litigation, claim, assessment or
government investigation and (B) in the event sales of Registrable Securities
were made under the Registration Statement and disclosure of all material
information with respect to the applicable circumstance(s) described in
subparagraph (A) had not been made, such circumstances would be reasonably
likely to cause a violation of the 1933 Act or the 1934 Act and result in
potential liability to Individual (each a "SUSPENSION EVENT"); then, subject
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to paragraph (d) below, the Company shall deliver a certificate in writing to
the Notice Holders (the "SUSPENSION NOTICE") to the effect of the foregoing
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and, upon receipt of such Suspension Notice, each such Holder will refrain
from selling any Registrable Securities pursuant to the Registration Statement
(a "SUSPENSION") until such Holder's receipt of copies of the supplemented or
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amended Prospectus provided for in Section 3.2(a)(i) hereof, or until it is
advised in writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
(c) In the event of any Suspension, or any delay in effecting the
Registration under Section 3.2 above, the Company will use its best efforts to
cause the use of the Prospectus so suspended or delayed to be commenced or
resumed, as the case may be, and that any Selling Period so suspended will
commence or resume, as the case may be, as soon as reasonably practicable and,
in the case of a pending development, filing or event referred to in Section
3.2(b)(iv) or (v) hereof, as soon, in the judgment of the Company's Board of
Directors (in accordance with the provisions of Section 3.2), as disclosure of
the material relating to such pending development, filing or event would not
have an adverse effect on the Company's ability to consummate the transaction,
if any, to which such development, filing or event relates.
(d) Upon the commencement of an underwritten public offering of
securities of Individual pursuant to a Registration Statement to which Section
2 would apply, in addition to the Suspension provisions set forth in Section
3.2, Individual may, in its sole discretion, by written notice to the Holders,
prohibit the Holders from selling any Registrable Securities pursuant to the
resale Registration Statement provided for in this Section 3 until thirty (30)
days after the completion of the underwritten public offering; provided,
however, that the Holders shall in such event be permitted to participate in
such underwritten public offering through the exercise of their "piggy-back"
registration rights provided for in Section 2 above, pursuant to the terms and
subject to the conditions set forth therein.
(e) The Company will use its best efforts to maintain the
effectiveness of any Registration Statement pursuant to which any of the
Registrable Securities are being offered for (i) up to 90 days, (or such
shorter period of time as the underwriters need to complete the distribution
of the registered offering in any Company-primary or secondary offering), in
the case of a registration pursuant to Section 2, or (ii) in the case of a
"shelf" Registration Statement pursuant to Section 3.1 until the earlier of
(A) the second anniversary of the Effective Time or (B) the date on which each
Holder may sell all Registrable Securities then held by such Holder without
restriction by the volume limitations of Rule 144(e). The Company from time
to time will amend or supplement such Registration Statement and the
prospectus contained therein to the extent necessary to comply with the 1933
Act and any applicable state securities statue or regulation. The Company
will also provide each holder of Registrable Securities with as many copies of
the prospectus contained in any such Registration Statement as it may
reasonably request.
3.3 UNDERWRITING AGREEMENT
If in connection with any proposed distribution by the Holders under the
"piggy back" registration referred to in Section 2, the Company in its
discretion shall determine that it is in the best interests of the Company to
effect distribution by means of an underwriting, the Company shall promptly
notify the Holders of such determination. In such event, the right of any
Holder to participate in such distribution shall be conditioned upon such
Holder's participation in the underwriting arrangements required by this
Section 3.3, including without limitation, the requirement that the Holder
enter into an underwriting agreement and a lock-up agreement with the managing
underwriter selected for the underwriting by the Company each in customary
form and subject to the terms and conditions determined by the Company and the
underwriters.
4. [INTENTIONALLY OMITTED]
5. EXPENSES
The Company will pay all Registration Expenses in connection with the
registration of Registrable Securities effected by the Company pursuant to
Sections 2 and 3. Holders of Registrable Securities registered pursuant to
this Agreement shall pay all Selling Expenses with each such Holder bearing a
pro rata portion of the Selling Expenses based upon the number of Registrable
Securities registered by such Holder.
6. EXPIRATION OF REGISTRATION RIGHTS
The obligations of the Company under Section 2 of this Agreement to
register the Registrable Securities shall expire and terminate at such time as
the Holder shall be entitled or eligible to sell all such securities without
restriction and without a need for the filing of a Registration Statement
under the Securities Act, including without limitation, for any resales of
restricted securities made pursuant to Rule 144(k) as promulgated by the
Securities and Exchange Commission. The determination as to whether the Holder
is entitled or eligible to sell all Registrable Securities without the need
for registration under the Securities Act shall be based on a written opinion
of counsel that registration of the Registrable Securities is not required
under the Securities Act, sufficient to permit the transfer agent to transfer
such securities upon a sale by the Holder. The obligations of the Company
under Section 3 of this Agreement shall expire at the time specified in
Section 3.2(e)
7. REGISTRATION PROCEDURES
In connection with the registration of Registrable Securities under this
Agreement, and subject to the other provisions of this Agreement, the Company
shall:
(a) use its best efforts to cause the Registration Statement filed in
accordance with Section 2 or Section 3 to become effective as soon as
practicable after the date of filing thereof;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration Statement
continuously effective for the shorter of (i) the duration of its registration
obligations, or (ii) until there are no Registrable Securities outstanding,
and to comply with the provisions of the 1933 Act with respect to the
disposition of the Registrable Securities;
(c) furnish to each Seller of such Registrable Securities such number
of copies of the Prospectus included in such Registration Statement as such
Seller may reasonably request in order to facilitate the sale or disposition
of such Registrable Securities;
(d) use its best efforts to register or qualify all securities
covered by such Registration Statement under such other securities or "blue
sky" laws of such jurisdictions as each Seller shall reasonably request, and
do any and all other acts and things that may be necessary to enable such
Seller to consummate the disposition in such jurisdictions of its Registrable
Securities covered by such Registration Statement, except that the Company
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it is not so qualified,
or to subject itself to taxation in respect of doing business in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
(e) notify each Seller of Registrable Securities covered by such
Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the 1933 Act, of the happening of any event as
a result of which the Prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing
or if it is necessary to amend or supplement such Prospectus to comply with
the law, and at the request of any such Seller, prepare and furnish to such
Seller a reasonable number of copies of a supplement to or an amendment of
such Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities or securities, such Prospectus, as
amended or supplemented, will comply with the law;
(f) timely file with the Commission such information as the
Commission may prescribe under Section 13 or 15(d) of the 1934 Act and
otherwise use its best efforts to ensure that the public information
requirements of Rule 144 under the 1933 Act are satisfied with respect to the
Company. The Company shall furnish to any Holder of Registrable Securities,
upon reasonable request, copies of the Company's most recent annual and
quarterly reports and other publicly available documents filed with the
Commission as a Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing such Holder to sell Registrable
Securities without registration.
(g) use its best efforts to qualify such securities for inclusion in
the Nasdaq National Market, and provide a transfer agent and registrar for
such Registrable Securities not later than the effective date of such
Registration Statement; and
(h) issue to any person to which any Holder of Registrable Securities
may sell such Registrable Securities in connection with such registration
certificates evidencing such Registrable Securities without any legend
restricting the transferability of the Registrable Securities.
From time to time, the Company will amend or supplement such Registration
Statement and the prospectus contained therein to the extent necessary to
comply with the 1933 Act and any applicable state securities statute or
regulation. The Company will also provide the holder of Registrable
Securities with as many copies of the prospectus contained in any such
Registration Statement as it may reasonably request.
8. 1934 ACT REGISTRATION
The Company shall timely file with the Commission such information as the
Commission may require under Section 13 or 15(d) of the 1934 Act; and in such
event, the Company shall use its best efforts to take all action pursuant to
Rule 144(c) as may be required as a condition to the availability of Rule 144
under the 1933 Act (or any successor exemptive rule hereinafter in effect)
with respect to such Common Stock. The Company shall furnish to any holder of
Registrable Securities upon reasonable request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144(c),
(ii) a copy of the most recent annual or quarterly report of the Company as
filed with the Commission, and (iii) such other publicly-filed reports and
documents as a holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a holder to sell any such Registrable
Securities without registration.
9. HOLDER INFORMATION
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that all Holders of Registrable
Securities shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of disposition
of such Registrable Securities as shall be reasonably required to effect the
registration of their Registrable Securities and to execute such documents in
connection with such registration as the Company may reasonably request.
10. INDEMNIFICATION AND CONTRIBUTION
In the event any Registrable Securities are included in a Registration
Statement under Section 2 or 3:
(a) The Company will indemnify and hold harmless each Seller, the
officers, directors, partners, agents and employees of each Seller, any
underwriter (as defined in the 1933 Act) for such Seller and each person, if
any, who controls such Seller or underwriter within the meaning of the 1933
Act or the 1934 Act, against any losses, claims, damages or liabilities (joint
or several) to which they may become subject under the 1933 Act, the 1934 Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a
"VIOLATION"): (i) any untrue statement or alleged untrue statement of a
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material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto; (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; or (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the 1933 Act, the 1934 Act or any state securities law; and
the Company will reimburse each such Seller, officer, director, partner,
agent, employee, underwriter or controlling person for any reasonable legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 10(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld or delayed), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by any such Seller, underwriter or controlling person.
(b) Each Seller will indemnify and hold harmless the Company, each of
its officers, directors, partners, agents or employees, each person, if any,
who controls the Company within the meaning of the 1933 Act, any underwriter
and any other Seller or any of its directors, officers, partners, agents or
employees or any person who controls such Seller, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, partner, agent, employee, controlling person or
underwriter, or other such Seller or director, officer, partner, agent,
employee or controlling person may become subject, under the 1933 Act, the
1934 Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Seller expressly for use in connection with such
registration; and each such Seller will reimburse any reasonable legal or
other expenses reasonably incurred by the Company or any such director,
officer, partner, agent, employee, controlling person or underwriter, other
Seller, officer, director, partner, agent, employee or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. Notwithstanding anything contained in this Agreement to
the contrary, the indemnity agreement contained in this Section 10(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Seller, which consent shall not be unreasonably withheld or delayed; provided
further, that the aggregate liability of each Seller in connection with any
sale of Registrable Securities pursuant to a Registration Statement in which a
Violation occurred shall be limited to the net proceeds from such sale.
(c) Promptly after receipt by an indemnified party under this Section
10 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 10, 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 the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
shall have the right to retain its own counsel, with the fees and expenses to
be paid by the indemnifying party, if representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due
to actual or potential differing or 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 of the commencement of any such action, to the extent
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of liability to the indemnified party under this Section 10
to the extent of such prejudice, but 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 10.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section 10, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to liabilities and expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying parties and the
indemnified parties, except to the extent that contribution is not permitted
under Section 11(f) of the 1933 Act. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, the parties' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission and any other equitable
considerations appropriate under the circumstances, including, without
limitation, whether any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, on the one hand, or by the Holder of
Registrable Securities, on the other hand. The Company and the Holders of the
Registrable Securities covered by such Registration Statement agree that it
would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation. No seller of Registrable Securities
covered by such Registration Statement or person controlling such Seller shall
be obligated to make any contribution hereunder which in the aggregate exceeds
the net proceeds of the securities sold by such seller, less the aggregate
amount of any damages which such seller and its controlling persons have
otherwise been required to pay in respect of the same claim or any
substantially similar claim. The obligations of such Holders to contribute
are several in proportion to their respective ownership of the Registrable
Securities covered by such Registration Statement and not joint.
11. TRANSFERABILITY
Each Holder agrees that he will not make any disposition of all or any
portion of the Registrable Securities (a) except in a registered public
offering pursuant to the rights granted in this Agreement; or (b) until (i)
such Holder shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition and (ii) if reasonably
requested by the Company, such Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to counsel for the Company, that
such disposition will not require registration of such Registrable Securities
or such transaction under the 1933 Act or applicable state securities laws.
The registration rights set forth in this Agreement are not transferable
except to (i) a trust created for the benefit of any of the Holders or their
immediate family members, (ii) a member of the immediate family of any of the
Holders, or (iii) any partner (including a limited partner) or affiliate of a
Holder, provided that all such transferees must first agree in writing to be
bound by all of the provisions of this Agreement. A Holder shall promptly
advise the Company in writing of the identity and address of any person to
whom it transferred its registration rights hereunder.
12. LEGENDS
Each Holder understands and agrees that the certificates evidencing the
Registrable Securities will bear legends in substantially the following form:
"This security has not been registered under the Securities Act of 1933
or any state securities laws and may not be transferred or otherwise disposed
of unless it has been registered under such act and all applicable state
securities laws or unless the Company has received an opinion of counsel
satisfactory to the Company and its counsel that such registration is not
required."
The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities are
eligible for resale pursuant to Rule 144(k) under the Securities Act.
13. MISCELLANEOUS
13.1 AMENDMENTS AND WAIVERS
Any provision of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Holders of a majority of the Registrable Securities then outstanding.
Any amendment or waiver effected in accordance with this Section 13.1 shall be
binding upon each Holder of Registrable Securities at the time outstanding,
each future Holder of Registrable Securities, and the Company.
13.2 NOTICES
Any notice required or permitted to be given hereunder shall be in
writing and shall be deemed given at the opening of business on the first
Business Day following the time (a) delivery is made, if by hand delivery, (b)
the facsimile is successfully transmitted, if by telecopier or facsimile
machine, or (c) the Business Day after such notice is deposited with a
reputable overnight courier service, postage prepaid, for next-day delivery,
addressed as respectively set forth below or to such other address as any
party shall have previously designated by such a notice.
To the Company:
Individual, Inc.
8 New England Executive Park West
Burlington, MA 01803
Fax: (617) 273-6090
Attention: President
with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, Massachusetts 02110
Fax: (617) 248-7100
Attention: William B. Asher, Jr.
To a Holder of Registrable Securities:
At the addresses listed in Schedule A hereto.
13.3 GOVERNING LAW
This Agreement shall for all purposes be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to
conflicts-of-laws principles. The parties hereto agree to submit to the
jurisdiction of the federal and state courts of the State of Delaware with
respect to the breach or interpretation of this Agreement or the enforcement
of any and all rights, duties, liabilities, obligations, powers and other
relations between parties arising under this Agreement.
13.4 SEVERABILITY
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excised from this Agreement, and
the remainder of this Agreement shall be interpreted as if such provision were
so excised and shall be enforceable in accordance with its remaining terms.
13.5 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same instrument. Any holder of shares of Common Stock
of ClariNet immediately prior to the Effective Time who is not a party to this
Agreement as of the date hereof and who receives shares of Individual Common
Stock in exchange for such shares of ClariNet Common Stock pursuant to the
Merger Agreement may, after the date hereof, become a party to this Agreement
and a "Shareholder" for all purposes hereunder by signing and delivering to
the Company a counterpart signature page to this Agreement, without the need
for any amendment of this Agreement.
13.6 BROADVIEW HOLDBACK
The registration rights granted to the Shareholders pursuant to this
Agreement, including, without limitation, the rights set forth in Sections 2
and 3, shall not apply to Broadview Associates notwithstanding its execution
of this Agreement and inclusion as a "Shareholder" hereunder, unless and until
Broadview becomes entitled to such registration rights pursuant to Section 5
of the Fee Payment Agreement.
13.7 SUCCESSORS AND ASSIGNS
Subject to Section 11 above and except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate
--------------
written notice of the permitted transfer of any Registrable Securities
--
specifying the full name and address of the transferee, the Company may deem
--
and treat the person listed as the holder of such shares in its records as the
absolute owner and holder of such shares for all purposes.
13.8 DELAYS OR OMISSIONS
It is agreed that, except as otherwise expressly provided herein, no
delay or omission to exercise any right, power, or remedy accruing to any
Holder, upon any breach, default or noncompliance of the Company under this
Agreement, shall impair any such right, power, or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent,
or approval of any kind or character on any Holder's part of any breach,
default or noncompliance under the Agreement or any waiver on such Holder's
part of any provisions or conditions of this Agreement must be in writing and
shall be effective only to the extent specifically set forth in such writing.
Unless otherwise expressly provided herein and to the extent permitted by
applicable law, all remedies, either under this Agreement, by law, or
otherwise afforded to Holders, shall be cumulative and not alternative.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
INDIVIDUAL, INC.
By: /s/ Robert L. Lentz
------------------------
Print Name:Robert L. Lentz
-----------------
Title: Senior Vice President, Finance and Administration, Chief Financial
Officer, Treasurer and Secretary
SHAREHOLDERS:
/s/ Brad Templeton
Brad Templeton
/s/ Roy Folk
Roy Folk
BROADVIEW ASSOCIATES
By: /s/ Javier E. Rojas
Print Name: Javier E. Rojas
Title: Managing Director
SCHEDULE A
[OMMITED]