EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (the "Agreement") is entered into as of
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March 2, 2001, by and among Loudeye Technologies, Inc., a Delaware corporation
(the "Acquiror"), and those holders of the Acquiror's Common Stock whose names
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are set forth on Exhibit A attached hereto (collectively, the "Stockholders").
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RECITALS
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The Acquiror, ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation ("Target"),
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and Santa Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary
of the Acquiror ("Sub"), have entered into an Agreement and Plan of Merger dated
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as of January 30, 2001 (the "Merger Agreement"), which provides for the
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acquisition of Target by the Acquiror through a merger (the "Merger") of Target
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with and into Sub and the issuance by the Acquiror to the Stockholders of shares
of the Acquiror's Common Stock (the "Acquiror Shares") in consideration of the
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shares of Target (the "Target Shares") exchanged by the Stockholders in the
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Merger. As a condition to the closing of the Merger, the Stockholders desire to
obtain and the Acquiror has agreed to grant certain registration rights to the
Stockholders with respect to the Acquiror Shares.
AGREEMENT
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The parties hereby agree as follows:
1. Registration Rights.
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1.1 Definitions. For purposes of this Section 1:
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(a) The terms "register," "registered," and "registration"
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refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), and the subsequent declaration or ordering of
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the effectiveness of such registration statement or document.
(b) The term "Registrable Securities" means:
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(i) the Acquiror Shares; and
(ii) any other shares of Common Stock of the Acquiror issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, the Acquiror Shares, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which his or her rights under this Agreement are not assigned; provided,
however, that Common Stock or other securities shall only be treated as
Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions, and restrictive legends
with respect thereto, if any, are removed upon the consummation of such sale.
(c) The number of shares of "Registrable Securities then
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outstanding" shall mean the number of shares of Common Stock outstanding which
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are, and the number of shares of Common Stock issuable pursuant to the then
exercisable or convertible securities which are, Registrable Securities;
(d) The term "Holder" means any holder of outstanding
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Registrable Securities who, subject to the limitations set forth in Section 1.7
below, has a contractual relationship with Acquiror entitling such person to
certain registration rights in connection with such Company Common Stock;
(e) The term "Form S-3" means such form under the Securities Act
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as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by Acquiror with
the SEC; and
(f) The term "SEC" means the Securities and Exchange Commission.
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1.2 Registration. Acquiror will effect one registration on Form S-3
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on April 2, 2001 (or use best commercial efforts to effect such registration
statement as soon as practicable thereafter), with respect to the Registrable
Securities (the "Registration Statement") and any related qualification or
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compliance with respect to all or a part of the Registrable Securities owned by
the Holders, Acquiror will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all Holders;
(b) as soon as practicable, effect such registration and all
such qualifications and compliances and as would permit or facilitate the sale
and distribution of the Registrable Securities. Notwithstanding the foregoing,
Acquiror shall not be obligated to effect any such registration, qualification
or compliance, pursuant to this Section 1.2: (1) if Acquiror or the Holders are
not eligible for use of Form S-3, in which case Acquiror shall effect such
registration as soon as practicable after it and they become eligible for use of
Form S-3; or (2) in any particular jurisdiction in which the Acquiror would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance; and
(c) Subject to the foregoing, the Acquiror will use reasonable
commercial efforts to file the Registration Statement on Form S-3 covering the
Registrable Securities on April 2, 2001 (or within a reasonable time
thereafter). All expenses incurred in connection with a registration requested
pursuant to Section 1.2,
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including (without limitation) all registration, filing, qualification, printer
and accounting fees shall be borne by the Acquiror. The Acquiror shall not be
required to pay any underwriters' or brokers' fees, discounts or commissions
relating to the Registrable Securities, or the fees or expenses of separate
counsel to the selling Holders.
(d) Notwithstanding the foregoing, Acquiror shall have no
obligation to cause any such registration, qualification or compliance pursuant
to this Section 1.2 to become effective prior to April 15, 2001.
(e) Notwithstanding the foregoing, Acquiror shall have no
requirement to file the Registration Statement prior to the date that is five
(5) days following receipt of financial statements of Target for the fiscal year
end ended December 31, 2000.
(f) If Acquiror is not eligible for use of Form S-3 on April 2,
2001, and Acquiror is unable to effect such registration using Form S-3 by May
15, 2001, Acquiror will effect one registration on Form S-1 or S-2 (whichever
Acquiror is eligible for use and within Acquiror's sole discretion) with respect
to the Registrable Securities and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by the Holders. In
such event, Acquiror will be subject to same terms and conditions with such
filing under this 1.2(f) as set forth in 1.2 (a) - (e), substituting "S-1" or
"S-2", as applicable, for the term "S-3".
1.3 Obligations of the Acquiror.
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(a) Whenever required under this Section 1 to effect the
registration of any Registrable Securities, the Acquiror shall, as expeditiously
as reasonably possible:
(i) prepare and file with the SEC the Registration
Statement and such amendments and supplements to the Registration Statement and
the prospectus used in connection therewith and any post-effective amendments or
other forms or filings as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered
thereby;
(ii) furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities under such registration statement;
(iii) use its best commercial efforts to register and
qualify the securities covered by such registration statement under such other
securities or "Blue Sky" laws of such jurisdictions as shall be reasonably
requested by the Holders; provided, however, Acquiror shall not be required in
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connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
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(iv) notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the 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 a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; and
(v) cause all such Registrable Securities registered
thereunder to be listed on each securities exchange or nationally recognized
quotation system on which similar securities issued by Acquiror are then listed.
(b) Requirement to Keep Effective. Acquiror shall use its best
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commercial efforts to cause such registration statement to remain effective,
subject to Section 1.3(c), until the first to occur of (1) the second
anniversary of the effective date of the Registration Statement, (2) the date by
which all Registrable Securities included therein are sold or (3) the date all
Holders are eligible to sell all such Holder's Registrable Securities in any
three month period pursuant to Rule 144 (or such successor rule as may be
adopted).
(c) Suspension. Notwithstanding Section 1.2 or the above,
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Acquiror shall have the right, exercisable three times in the first year
following the effective date of the Registration Statement ("Year One") and two
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times in the second year following the effective date of the Registration
Statement ("Year Two"), to suspend sales of Registrable Securities pursuant to
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an effective registration statement for a period not to exceed an aggregate of
75 days in Year One and an aggregate of 75 days in Year Two, in the event that
the Board of Directors of Acquiror determines that such suspension is in the
best interests of the Acquiror.
1.4 Furnish Information. It shall be a condition precedent to the
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obligations of the Acquiror to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Acquiror such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
1.5 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Acquiror will indemnify
and hold harmless each Holder and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against any losses, claims, damages, or
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liabilities (joint or several) to which they may become subject, under the
Securities Act, the Exchange 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
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following statements, omissions or violations (collectively a "Violation"): (i)
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any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any 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 not misleading, or (iii) any violation or alleged
violation by the Acquiror 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; and the Acquiror will pay, as
incurred, any 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
subsection 1.5(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 Acquiror, which consent shall not be unreasonably withheld,
nor shall the Acquiror 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
such Holder or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Acquiror, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Acquiror within the meaning of the Securities Act or the Exchange
Act, any other Holder selling securities in such registration statement and any
controlling person of any such other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Securities Act, the Exchange 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 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
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 1.5(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.5(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 Holder, which consent shall not be unreasonably
withheld; provided that in no event shall any indemnity under this subsection
1.5(b) exceed the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.5 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 1.5, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to
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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 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, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 1.5, 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 1.5.
(d) If the indemnification provided in this Section 1.5 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the Acquiror and Holders under this
Section 1.5 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.6 Reports Under Securities Exchange Act of 1934. With a view to
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making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Acquiror to the public without
registration, the Acquiror agrees to use its best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Acquiror under the Securities Act and the Exchange
Act; and
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(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Acquiror that it has complied with the reporting requirements of SEC Rule 144,
the Securities Act and the Exchange Act, (ii) a copy of the most recent annual
or quarterly report of the Acquiror and such other reports and documents so
filed by the Acquiror, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration.
1.7 Assignment of Registration Rights. The rights to cause the
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Acquiror to register Registrable Securities pursuant to this Section 1 may be
assigned by a Holder to a transferee or assignee of at least the lesser of (a)
all of such Holder's Registrable Securities, or (b) 100,000 shares of such
securities (as adjusted for stock splits, combinations, dividends, or
recapitalizations) provided the Acquiror is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act. The foregoing share limitation shall not
apply, however, to transfers by a Stockholder to any wholly-owned subsidiary or
constituent Stockholders (if a corporation), partner of the Stockholder (if a
partnership), or any spouse, son or daughter of the Stockholder (if an
individual), or to trustees of a trust the beneficiaries of which include the
Stockholder and any spouse, son or daughter of the Stockholder, provided that
all such transferees or assignees agree in writing to appoint a single
representative as their attorney in fact for the purpose of receiving any
notices and exercising their rights under this Section 1.
1.8 Termination of Registration Rights. No Holder shall be entitled
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to exercise any right provided for in this Section 1 after the earlier of (a)
two years following the effective date of the Registration Statement, (b) with
respect to any Holder, at such time as such Holder may sell all of such Holder's
Registrable Securities in any three month period pursuant to Rule 144 (or such
successor rule as may be adopted), or (c) the date on which Acquiror sells,
conveys, or otherwise disposes of all or substantially all of its property or
business or merges with or into or consolidate with any other corporation (other
than a wholly-owned subsidiary corporation) or effects any other transaction or
series of related transactions in which more than 50% of the voting power of
Acquiror is disposed of and Acquiror is not the survivor.
2. Miscellaneous.
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2.1 Amendments and Waivers. Any term of this Agreement may be
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amended or waived with the written consent of the Acquiror and the Holders of at
least a majority of the outstanding Registrable Securities. Any amendment or
waiver effected in accordance with this Section 2.1 shall be binding upon the
parties and their respective successors and assigns. In addition, the Acquiror
may waive performance of any
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obligation owing to it, as to some or all of the Holders of Registrable
Securities, or agree to accept alternatives to such performance, without
obtaining the consent of any Holder of Registrable Securities. Each Holder
acknowledges that by the operation of Section 2.1 hereof, the Holders of a
majority of the outstanding Registrable Securities, acting in conjunction with
the Acquiror, will have the right and power to diminish or eliminate all rights
pursuant to this Agreement.
2.2 Successors and Assigns. Subject to the provisions of Section
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1.7, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
2.3 Governing Law; Jurisdiction. This Agreement shall be governed
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and construed in accordance with the laws of the State of Washington without
regard to any applicable conflicts of law. In any action between the parties
arising out of or relating to this Agreement or any of the transactions
contemplated by this Agreement: (a) each of the parties irrevocably and
unconditionally consents and submits to the exclusive jurisdiction and venue of
the state and federal courts located in the State of Washington; (b) if any such
action is commenced in a state court, then, subject to applicable law, no party
shall object to the removal of such action to any federal court located in the
Western District of Washington; (c) each of the parties irrevocably waives the
right to trial by jury; and (d) each of the parties irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid, to the address at which such party is to receive notice in
accordance with Section 2.6.
2.4 Counterparts. This Agreement may be executed in two or more
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counterparts (including by facsimile copies and facsimile signatures), each of
which shall be deemed an original and all of which together shall constitute one
instrument.
2.5 Titles and Subtitles. The titles and subtitles used in this
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Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.6 Notices. Any notice required or permitted by this Agreement
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shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
48 hours after being deposited in the regular mail as certified or registered
mail (airmail if sent internationally) with postage prepaid, if such notice is
addressed to the party to be notified at such party's address or facsimile
number as set forth below, or as subsequently modified by written notice, and
(a) if to the Acquiror, with a copy to: Venture Law Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
2.7 Severability. If one or more provisions of this Agreement are
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held to be unenforceable under applicable law, the parties agree to renegotiate
such provision
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in good faith, in order to maintain the economic position enjoyed by each party
as close as possible to that under the provision rendered unenforceable. In the
event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded from
this Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement shall be
enforceable in accordance with its terms.
2.8 Entire Agreement. This Agreement is the product of all of the
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parties hereto, and constitutes the entire agreement between such parties
pertaining to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard to the transactions contemplated herein. Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.
2.9 Advice of Legal Counsel. Each party acknowledges and represents
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that, in executing this Agreement, it has had the opportunity to seek advice as
to its legal rights from legal counsel and that the person signing on its behalf
has read and understood all of the terms and provisions of this Agreement. This
Agreement shall not be construed against any party by reason of the drafting or
preparation thereof.
2.10 Rights of Holders. Each Holder of Registrable Securities shall
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have the absolute right to exercise or refrain from exercising any right or
rights that such Holder may have by reason of this Agreement, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such Holder shall not incur any liability to any other
Holder of any securities of the Acquiror as a result of exercising or refraining
from exercising any such right or rights.
2.11 Delays or Omissions. No delay or omission to exercise any right,
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power or remedy accruing to any party to this Agreement, upon any breach or
default of the other party, shall impair any such right, power or remedy of such
non-breaching party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement, or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.
2.12 Third Parties. Nothing in this Agreement, express or implied, is
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intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
[Signature Page Follows]
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The parties have executed this Agreement as of the date first above
written.
COMPANY:
LOUDEYE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: President and Chief Executive Officer
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Address: Times Square Building
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
STOCKHOLDERS:
____________________________________________
Name:
Address: ___________________________________
____________________________________________
____________________________________________
Name:
Address: ___________________________________
____________________________________________
