COSALEAGREEMENT.doc

COSALEAGREEMENT thiscosaleagreement(thisagreement)ismadeandenteredintoasof,(m/d/y)byandbetweenaaausa,inc.,a(placename)corporation(thepany),(ii)bbb,inc.(bbb)and(iii)ccc(sb)(ccc(sb). a.concurrentlyherewith,bbbandthepanyareenteringintothatcertainagreement,datedasofthedatehereof(theprincipalagreement;capitalizedtermsusedhereinandnototherwisedefinedshallhavethemeaningsdefinedintheprincipalagreement),pursuanttowhich,amongotherthings,bbbwillacquiresharesofmonstockandwarrantsinconsiderationofthelicensebybbbofthebbblogosandthebbbcontentandprovisionbybbbofcertainbroadcastadvertisingandpromotion. b.toinducebbbtoenterintotheprincipalagreement,ccc(sb)hasagreedtoenterintothisagreementandofferbbbtheopportunitytoparticipateincertainsalesofhissharesofmonstockofthepany. nowtherefore,inconsiderationoftheaboverecitalsandthemutualcovenantsmadeherein,thepartiesherebyagreeasfollows: 1.rightofcosale. 1.1heeventccc(sb)proposestoacceptoneormorebonafideoffers(collectively,thepurchaseoffer)fromanypersonstopurchasefromhimsharesofthemonstockofthepany,hepromptlyshallgivewrittennotice(thenotice)tobbbdescribingfullythepurchaseoffer,includingthenumberofsharesofmonstockproposedtobetransferred(theshares),theproposedbonafidetransferpriceandthenameandaddressoftheproposedtransferee.thenoticemaybeincludedasapartofanynoticerequiredtobegivenbyccc(sb)underarticleeight,section1ofthepanysbylaws. 1.2participationright.totheextentthatthepanyandotherstockholdersofthepanyhavenotexercisedtheirrespectiverightsoffirstrefusaltopurchasethesharesinaccordancewitharticleeightofthepanysbylaws,bbbshallhavetheright(theparticipationright)toparticipateinccc(sb)ssaleofthesharesunderthetermsandconditionsspecifiedinthepurchaseoffer.totheextentbbbexercisesitsparticipationrights,thenumberofshareswhichccc(sb)maysellpursuanttothepurchaseoffershallbecorrespondinglyreduced.theparticipationrightofbbbissubjecttothefollowingtermsandconditions: (a)numberofshares.bbbmaysellitsproratashareofthesharescoveredbythepurchaseoffer.bbbsproratashareforpurposesofthisagreementisthatnumberofsharesofmonstockequaltotheproductobtainedbymultiplying(i)theaggregatenumberofsharescoveredbythepurchaseoffer,times(ii)afraction,thenumeratorofwhichisthesumofthenumberofsharesofmonstockatthetimeownedbybbbandthedenominatorofwhichistheaggregatenumberofsharesofmonstockatthetimeoutstanding,assumingconversionofalloutstandingpreferredstockofthepanyandtheexerciseofalloptionsandwarrantsthenoutstanding. (b)exercisenotice.ifbbbdesirestoexerciseitsparticipationrights,bbbshallprovideccc(sb),withinthirtydaysafterbbbsreceiptofthenotice,awrittennoticeofsuchelection(exercisenotice)specifyingthenumberofsharesofmonstockthatbbbelectstosellpursuanttotheparticipationrights.eachexercisenoticeshallbeirrevocable,unlessotherwiseconsentedtobyccc(sb). (c)deliveryofcertificates.bbbshalleffectitsparticipationinthesalebydeliveringtothepanypromptlyfollowingexerciseofitsparticipationright,fordeliverytothepurchaserofthesharesattheclosingofthetransactioncontemplatedbythepurchaseoffer,oneormorecertificates,properlyendorsedfortransfer,representingthenumberofsharesofmonstockwhichbbbhaselectedtosellpursuanttotheparticipationrights. (d)transferofshares.thestockcertificateorcertificateswhichbbbdeliverstothepanypursuanttosection1.2(c)shallbedeliveredbythepanytothepurchaserunderthepurchaseofferattheclosingofthetransactioncontemplatedbythepurchaseoffer;andthepanyshallreceiveonbehalfof,andpromptlyremittobbb,thatportionofthesaleproceedswhichbbbisentitledtoreceivebyreasonofitsparticipationinthesale. (e)closing.whetherornotbbbexercisesitsparticipationrights,theclosingofthesaleofthesharessubjecttothepurchaseoffershalltakeplacenotlaterthanonehundredtwenty(120)daysfollowingthedatethenoticewasfirstdeliveredtobbb.attheclosing,ccc(sb)maysellanysharessubjecttothepurchaseofferastowhichbbbhasnotexerciseditsparticipationrights;and,ifbbbhasexerciseditsparticipationrights,theconsummationofsuchsaleshallbesubjecttothesalebybbbattheclosingofallsharesofmonstockwhichbbbhaselectedtosellpursuanttotheparticipationrights.anyproposedsaleontermsandconditionsmateriallydifferentfromthosedescribedinthenotice,aswellasanysubsequentproposedsalebyccc(sb),willagainrequirepliancebyccc(sb)withtheprovisionsofthisagreement. 1.3termination.thisagreementandtheparticipationrightsgrantedhereundershallterminateuponthefirsttooccurofthefollowing:(a)thetenthanniversaryofthedateofthisagreement; (b)theexecutionofawrittenagreementtoterminatethisagreementbyccc(sb)andbbb; (c)theconsummationofthefirstsaleofsecuritiesofthepanytothepublicpursuanttoaneffectiveregistrationstatementfiledbythepanyunderthesecuritiesactof1933,asamended; (d)thefirstdateonwhichbbboranyassigneetowhichsuchparticipationrightshavebeenassignedpursuanttosection2.1hereof(i)ownmonstockrepresentinglessthan10%ofthenumberofsharesofthepanysmonstockthatwouldbeoutstandingifallthenoutstandingsharesofthepanysconvertiblepreferredstockwerethenconvertedintosharesofmonstockor(ii)holdlessthan50%ofthenumberofsuchmonstockequivalentsharesasareissuabletobbbpursuanttotheprincipalagreementoranywarrantsissuablethereunder;or (e)upontheclosingof(i)anyconsolidationormergerofthepanywithorintoanyothercorporationorcorporationsinwhichtheholdersofthepanysoutstandingsharesimmediatelybeforesuchconsolidationormergerdonot,immediatelyaftersuchconsolidationormerger,retainstockrepresentingamajorityofthevotingpowerofthesurvivingcorporationofsuchconsolidationormergerorstockrepresentingamajorityofthevotingpowerofacorporationthatwhollyowns,directlyorindirectly,thesurvivingcorporationofsuchconsolidationormerger;(ii)thesale,transferorassignmentofsecuritiesofthepanyrepresentingamajorityofthevotingpowerofallthepanysoutstandingvotingsecuritiesbytheholdersthereoftoanacquiringpartyinasingletransactionorseriesofrelatedtransactions;or(iii)thesaleofallorsubstantiallyallthepanysassets. 2.assignmentofparticipationrights.theparticipationrightsofbbbundersection1hereofmaybeassignedonlytoabbbassignee;provided,however,thatnosuchassignmentofanyofsuchparticipationrightsshallbeeffectiveagainstthepanyorccc(sb)untilsuchtimeasthepanyandccc(sb)aregivenwrittennoticebytheassigningpartystatingthenameandaddressoftheassigneeandidentifyingthesecuritiesofthepanyastowhichtherightsinquestionarebeingassigned;andprovidedfurther,thatanysuchassigneeshallreceivesuchassignedparticipationrightssubjecttoallthetermsandconditionsofthisagreement,includingwithoutlimitationtheprovisionsofthissection2. 3.legendedcertificates. 3.1legend.eachcertificatesrepresentingsharesofthemonstocknoworhereafterownedbyccc(sb)shallbeendorsedwiththefollowinglegend:thesaleortransferofthesecuritiesrepresentedbythiscertificateissubjecttothetermsandconditionsofacertaincosaleagreementbyandamongtheshareholder,thecorporationandbbb,inc.copiesofsuchagreementmaybeobtaineduponwrittenrequesttothesecretaryofthecorporation. 3.2removaloflegend.thelegendrequiredbysection3.1shallberemoveduponterminationofthisagreementinaccordancewiththeprovisionsofsection1.3. 4.generalprovisions. 4.1notices.allnoticeshereunder(includingtheexercisenotice)shallbeinwritingandshallbegivenby(i)certifiedorregisteredmail,returnreceiptrequested;(ii)handdelivery;or(iii)nationallyrecognizedovernightcourierservice;anoticeshallbedeemedtohavebeengiven(a)whendeliveredbyhand;(b)threedaysaftermailing,inthecaseofcertifiedorregisteredmail;and(c)onebusinessdayafterbeingforwardedtoanationallyrecognizedovernightcourierserviceforovernightdelivery;ineachcasecorrectlyaddressedtosuchpartyatitsaddresssetforthbeloworsuchotheraddressassuchpartymayspecifybynoticetotheotherpartieshereto: (a)iftothepanyorccc(sb),at(address);and (b)iftobbb,at(address),attention:. 4.2entireagreement.thisagreement,togetherwithalltheexhibitshereto,constitutesandcontainstheentireagreementandunderstandingofthepartieswithrespecttothesubjectmatterhereofandsupersedesanyandallpriornegotiations,correspondence,agreements,understandings,dutiesorobligationsbetweenthepartiesrespectingthesubjectmatterhereof. 4.3amendmentsandwaivers.anytermsofthisagreementmaybeamendedandtheobservanceofanytermoftheagreementmaybewaived(eithergenerallyorinaparticular)instanceandeitherretroactivelyorprospectively),withthewrittenconsentofccc(sb)andbbb.anyamendmentorwaivereffectedinaccordancewiththissectionshallbebindinguponthepany,ccc(sb),bbbandtheirrespectivepermittedtransfereesandassignees. 4.4governinglaw.thisagreementshallbegovernedbyandconstruedexclusivelyinaccordancewiththeinternallawsofthestateof(placename)asappliedtoagreementsamong(placename)residentsenteredintoandtobeperformedentirelywithin(placename),excludingthatbodyoflawrelatingtoconflictoflawsandchoiceoflaw. 4.5severability.ifoneormoreprovisionsofthisagreementareheldtobeunenforceableunderapplicablelaw,thensuchprovision(s)shallbeexcludedfromthisagreeme