EXHIBIT 10.7
FORM OF REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is entered into as of
____________, 2000 by and between c-quential, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Inc., a Massachusetts corporation ("ADL").
WHEREAS, ADL owns shares of the class B common stock, par value $.01 per
share, of the Company; and
WHEREAS, the execution and delivery of this Agreement is a condition to the
transactions contemplated by the Reorganization Agreement dated as of _____,
2000 by and among the Company, ADL and the other parties named therein.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Definitions.
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As used in this Agreement, the following terms have the following meanings:
"Business Day" means a day other than Saturday, Sunday or any day on which
banks located in the State of New York are authorized or obligated to close.
"Class A Stock" means the class A common stock, par value $.01 per share,
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of the Company and any securities into which the Class A Stock shall have been
changed or any securities resulting from any reclassification or
recapitalization of the Class A Stock.
"Class B Stock" means the class B common stock, par value $.01 per share,
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of the Company and any securities into which the Class B Stock shall have been
changed or any securities resulting from any reclassification or
recapitalization of the Class B Stock.
"Commission" means the United States Securities and Exchange Commission.
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"Common Stock" means, collectively, the Class A Stock and the Class B
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Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
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time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means each holder of record of Registrable Securities.
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"Person" means any individual, corporation, partnership, limited liability
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company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration Statement
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(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, and by all other
amendments and supplements to the prospectus.
"Registrable Securities" means the Shares and any shares of Common Stock
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issued or issuable with respect to the Shares by reason of a stock dividend or
stock split, recapitalization or similar transaction, or a conversion of shares
from Class B Stock to Class A Stock, until such time as (i) a Registration
Statement covering such Registrable Securities has been declared effective and
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such Registrable Securities have been disposed of pursuant to such effective
Registration Statement and the transferee receives certificates from such
securities not bearing a restrictive Securities Act legend, and (ii) such
Registrable Securities are transferred to any Person other than a Holder
pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A)
under the Securities Act, including a sale pursuant to the provisions of Rule
144(k) and the transferee receives certificates from such securities not bearing
a restrictive Securities Act legend.
"Registration Statement" means any registration statement of the Company
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that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended from time to
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time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Shares" means the ________ shares of Class B Stock held by ADL.
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Section 2. Demand Registration.
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(a) At any time after the date which is six months after the closing of the
initial underwritten public offering of the Common Stock registered under the
Securities Act, Holders holding at least 50% of the Registrable Securities then
outstanding propose to dispose of all or part of such Registrable Securities,
then such Holders may request the Company in writing to effect such registration
under the Securities Act, stating the number of shares of Registrable Securities
to be disposed of and the intended method(s) of disposition of such shares.
Holders of Registrable Securities which request registration pursuant to this
Section 2(a) are referred to herein as the "Initiating Holders". In connection
with any registration under this Section 2 involving an underwriting (an
"Underwritten Offering"), the Initiating Holders will have the right to select
an investment banker(s) and manager(s) for such Underwritten Offering, which
investment banker(s) and manager(s) shall be reasonably satisfactory to the
Company. Upon receipt of a request from the Initiating Holders, the Company
shall give prompt written notice thereof to all other Holders and shall use
commercially reasonable efforts to promptly effect the registration under the
Securities Act of all Registrable Securities specified in the requests of the
Initiating Holders and the written requests (stating the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of such shares) of all other Holders given within 20 days after receipt of such
notice from the Company, all to the extent requisite to permit the disposition
(in accordance with the intended methods of disposition) of the Registrable
Securities to be registered.
(b) Notwithstanding the foregoing, the Company may postpone taking action
with respect to a registration requested pursuant to Section 2(a) (a "Demand
Registration") for a reasonable period of time after receipt of the request (not
exceeding 60 days) if, in the good faith opinion of the Company's Board of
Directors, effecting the registration would adversely affect a material
financing, acquisition, disposition of assets or stock, merger or other
comparable transaction or would require the Company to make public disclosure of
information the public disclosure of which could have a material adverse effect
upon the Company; provided that Company shall not delay such action pursuant to
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this sentence more than twice in any twelve (12) month period.
(c) If the managing underwriter(s) of an Underwritten Offering under this
Section 2 advises the Company that the number of securities to be sold in such
Underwritten Offering, is greater than the number which can be offered without
adversely impacting such Underwritten Offering, including, without limitation,
the price range or probability of success of such Underwritten Offering, then
the Company will include in such Underwritten Offering the number of securities
which the managing underwriter(s) advises the Company may be included in such
Underwritten Offering without such adverse impact in the following priority: (i)
first, Registrable Securities requested to be included in such registration by
the Holders (including the Initiating Holders) and (ii) second, other securities
of the Company proposed to be included in such registration, allocated among the
holders thereof in accordance with the priorities then existing among the
Company and the holders of such other securities.
Section 3. Piggyback Registration.
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(a) If at any time or times after the date hereof while any
Registrable Securities are outstanding the Company proposes to register under
the Securities Act any shares of Common Stock (other than (i) a registration on
Form S-8 or any successor form or in connection with any employee or director
welfare, benefit or compensation plan, (ii) a registration on Form S-4 or any
successor form or in connection with an exchange offer, (iii) a registration in
connection with a securities or rights offering exclusively to the Company's
securityholders, (iv) a registration in connection with an offering solely to
employees of the Company or its affiliates, (v) a registration relating to a
transaction pursuant to Rule 145 or any other similar rule of the Commission
under the Securities Act or (vi) a shelf registration), then the Company will
give written notice of such proposed registration to the Holders at least twenty
(20) days before the filing of any Registration Statement with respect thereto.
If within ten (10) days after such notice is given, the Company receives a
written request from any Holder for the inclusion in such Registration Statement
of some or all of the Registrable Securities held by such Holder (which request
will specify the number of Registrable Securities intended to be disposed of by
such Holder and the intended method of distribution thereof), the Company will
(subject to the provisions of paragraphs (b) and (c) of this Section 3) include
such Registrable Securities in
such Registration Statement. The Company may withdraw a Registration Statement
filed under this Section 3 at any time prior to the time it becomes effective,
provided that the Company will give prompt notice of such withdrawal to the
Holders which requested to be included in such Registration Statement.
(b) In connection with any Underwritten Offering under this Section 3, the
Company will not be required to include a Holder's Registrable Securities in
such Underwritten Offering unless such Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
the Company. If the managing underwriter(s) of an Underwritten Offering under
this Section 3 advises the Company that the number of securities to be sold in
such Underwritten Offering, including by Persons other than the Company
(including the Holders) (collectively, the "Selling Stockholders"), is greater
than the number which can be offered without adversely impacting such
Underwritten Offering, including, without limitation, the price range or
probability of success of such Underwritten Offering, then the Company will
include in such Underwritten Offering the number of securities which the
managing underwriter(s) advises the Company may be included in such Underwritten
Offering without such adverse impact in the following priority:
(i) if such registration as initially proposed by the Company
was solely a primary registration of its securities, (A) first, all
securities the Company proposes to sell, (B) second, Registrable Securities
proposed to be sold by the Holders and (C) third, securities proposed to be
sold by all Selling Stockholders other than the Holders, allocated among
such Selling Stockholders in accordance with the priorities then existing
among the Company and such Selling Stockholders.
(ii) if such registration as initially proposed by the Company
was in whole or in part requested by holders of securities of the Company
(other than Holders) pursuant to demand registration rights, (A) first,
such securities held by the holders initiating such registration and, if
applicable, any securities proposed by the Company to be sold for its own
account, allocated in accordance with the priorities then existing among
the Company and such holders, (B) second, any Registrable Securities
requested to be included in such registration by the Holders, and (C)
third, any other securities of the Company proposed to be included in such
registration, allocated among the holders thereof in accordance with the
priorities then existing among the Company and such holders.
(d) Each Holder hereby agrees that such Holder may not participate in any
Underwritten Offering unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in the underwriting arrangements
applicable to such Underwritten Offering and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of the underwriting
arrangements for such Underwritten Offering.
Section 4. Registration Procedures.
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(a) The Company shall prepare promptly, and file with the
Commission as required by Section 2(a), a Registration Statement with respect to
the number of Registrable Securities specified as provided in Section 2(a), and
thereafter shall use commercially reasonable efforts to cause such Registration
Statement relating to Registrable Securities to become effective as soon as
possible after such filing, and keep the Registration Statement effective at all
times until the earlier of (i) which is 180 days after the effective date of the
Registration Statement, or (ii) the date on which all Holders with Registrable
Securities included in the Registration Statement have sold such Registrable
Securities. Each Holder shall give notice to the Company when it has sold all of
its Registrable Securities covered by a Registration Statement.
(b) The Company will notify each Holder whose Registrable
Securities are included in a Registration Statement of the effectiveness of such
Registration Statement and will furnish to each such Holder and the
underwriters, if any, without charge, such number of conformed copies of such
Registration Statement and any post-effective amendment thereto and such number
of copies of the Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, as such Holder may reasonably request in
order to facilitate the sale of such Holder's Registrable Securities.
(c) The Company shall promptly prepare and file with the Commission
such amendments and post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement effective for as long as
such registration is required to remain effective pursuant to the terms hereof;
shall cause the Prospectus to be supplemented by any required Prospectus
supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and shall comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable Securities
covered by such Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders set forth in
such Registration Statement or supplement to the Prospectus;
(d) The Company will use commercially reasonable efforts to
register or qualify the Registrable Securities covered by any Registration
Statement under such other securities or "blue sky" laws of such states of the
United States as any Holder or underwriter reasonably requests; provided,
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however, that the Company will not be required (i) to qualify as a foreign
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corporation to do business in any jurisdiction in which it is not then
qualified, (ii) to file any general consent to service of process, or (iii) to
subject itself to taxation in any jurisdiction where it would not otherwise be
subject to taxation.
(e) The Company shall promptly notify each Holder and any
underwriter in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission or any state securities authority for
amendments and supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become effective,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) of the issuance by any state
securities commission or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable
Securities under state securities or "blue sky" laws or the initiation of any
proceedings for that purpose, (v) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and correct in all
material respects, and (vi) of the happening of any event which makes any
statement made in a Registration Statement or related Prospectus untrue or which
requires the making of any changes in such Registration Statement or Prospectus
so that they will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Immediately following expiration of any Suspension Period (as
defined in Section 5), the Company shall prepare and file with the Commission
and furnish a supplement or amendment to such Prospectus so that, as thereafter
deliverable to the purchasers of such Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) The Company shall make generally available to the Holders an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act no later than 45 days (90 days in the event it relates to a fiscal year)
after the end of the 12-month period beginning with the first day of the
Company's first fiscal quarter commencing after the effective date of a
Registration Statement, which earnings statement shall cover said 12-month
period, and which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on forms 10-Q, 10-K and 8-K under
the Exchange Act and otherwise complies with Rule 158 under the Securities Act.
(g) The Company shall promptly use commercially reasonable efforts
to prevent the issuance of any order suspending the effectiveness of a
Registration Statement, and if one is issued use commercially reasonably to
obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement at the earliest possible moment.
(h) The Company shall, if requested by the managing underwriter or
underwriters, if any, Holders' counsel, or any Holder promptly incorporate in a
Prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters reasonably requests, or Holders' counsel
reasonably requests, to be included therein, including, without limitation, with
respect to the Registrable Securities being sold by such Holder to such
underwriter or underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms of an
underwritten offering of the Registrable Securities to be sold in such offering,
and promptly make all required filings of such Prospectus supplement or post-
effective amendment.
(i) In the case of any underwritten public offering, the Company
shall furnish to each Holder and to each underwriter a signed counterpart,
addressed to such Holder or underwriter, of (i) an opinion or opinions of
counsel to the Company, and (ii) a comfort letter or comfort letters from the
Company's independent public accountants, each in customary form and
covering such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as the managing underwriter therefor reasonably
requests.
(j) The Company shall cause the shares of Common Stock included in a
Registration Statement to be listed on each securities exchange (or quoted on
each interdealer quotation system), if any, on which similar securities issued
by the Company are then listed.
Section 5. Suspension Period.
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Each Holder, upon receipt of any notice (a "Suspension Notice") from the
Company of the happening of any event of the kind described in Section 4(e)(vi),
shall forthwith discontinue disposition of the Registrable Securities pursuant
to the Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(f) or until it is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings which are incorporated by
reference in the Prospectus, and, if so directed by the Company, such Holder
will, or will request the managing underwriter or underwriters, if any, to,
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice; provided, however, that (x) the Company shall not give a Suspension
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Notice until after a Registration Statement has been declared effective, (y) the
Company shall not give more than two Suspension Notices during any period of
twelve consecutive months and (z) in no event shall the period from the date on
which any Holder receives a Suspension Notice to the date on which any Holder
receives either the Advice or copies of the supplemented or amended Prospectus
contemplated by Section 4(e) (the "Suspension Period") exceed 60 days. In the
event that the Company shall give any Suspension Notice, the Company shall use
commercially reasonable efforts and take such actions as are reasonably
necessary to render the Advice and end the Suspension Period as promptly as
practicable.
Section 6. Registration Expenses. Any and all expenses incident to the
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Company's performance of or compliance with this Agreement, including without
limitation all Commission and securities exchange, NASDAQ or NASD registration
and filing fees, all fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws (including reasonable fees and
disbursements of counsel for any underwriters in connection with "blue sky"
qualifications of the Registrable Securities), printing expenses, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing legal
or accounting duties), all expenses for word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, the fees and expenses incurred in connection with the listing of the
Registrable Securities, the fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company (including
the expenses of any special audit or comfort letters Securities Act liability
insurance (if the Company elects to obtain such insurance), the fees and
expenses of any
special experts or other Persons retained by the Company in connection with any
registration, the reasonable fees and disbursements of no more than one firm of
legal counsel for the Holders and any reasonable out-of-pocket expenses of the
Holders and their agents (other than their counsel) including any reasonable
travel costs (all such expenses being herein called "Registration Expenses"),
will be borne by the Company whether or not the Registration Statement to which
such expenses relate becomes effective provided, however, that Registration
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Expenses shall not include underwriting fees, discounts or commissions
attributable to the sale or disposition of Registrable Securities.
Section 7. Indemnification and Contribution.
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(a) Indemnification by the Company. The Company agrees to indemnify and
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hold harmless, to the full extent permitted by law, each Holder, its officers,
directors, employees and agents and each Person, if any, which controls such
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(collectively, "Controlling Persons"), from and against all losses, claims,
damages, liabilities and expenses (including without limitation any legal or
other fees and expenses reasonably incurred by any Holder or any such
Controlling Person in connection with defending or investigating any action or
claim in respect thereof) (collectively, "Damages") to which any of them may
become subject under the Securities Act or otherwise, insofar as such Damages
arise out of or are based upon (i) any untrue or alleged untrue statement of
material fact contained in any Registration Statement (including any related
preliminary or final Prospectus) pursuant to which Registrable Securities of
such Holder were registered under the Securities Act, (ii) any omission or
alleged omission to state therein a material fact 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 Securities Act, the Exchange Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"), except insofar as and to the extent that
such Violation arose out of or was based upon information regarding such Holder
or its plan of distribution which was furnished to the Company by such Holder
for use therein, provided, further that the Company will not be liable to any
person who participates as an underwriter in the offering or sale of Registrable
Securities or any Controlling Person of such underwriter, in any such case to
the extent that any such Damages arise out of or are based upon (A) an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement (including any related preliminary or final
Prospectus) in reliance upon and in conformity with information furnished to the
Company for use in connection with the Registration Statement or the Prospectus
contained therein by such underwriter or Controlling Person or (B) the failure
of such underwriter or Controlling Person to send or give a copy of the final
Prospectus furnished to it by the Company at or prior to the time such action is
required by the Securities Act to the person claiming an untrue statement or
alleged untrue statement or omission or alleged omission if such statement or
omission was corrected in such final prospectus. The obligations of the Company
under this Section 7(a) shall survive the completion of any offering of
Registrable Securities pursuant to a Registration Statement under this Agreement
or otherwise and shall survive the termination of this Agreement.
(b) Indemnification by the Holders. Each Holder agrees to indemnify and
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hold harmless, to the full extent permitted by law, the Company, its directors,
officers, employees and agents and each Controlling Person of the Company, from
and against any and all Damages to which any of them may become subject under
the Securities Act or otherwise to the extent such Damages arise out of or are
based upon any Violation, in each case to the extent that such Violation occurs
as a result of (i) any untrue statement or alleged untrue statement of material
fact contained in any Registration Statement (including any related preliminary
or final Prospectus), or any 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, if and to the extent that such statement or omission arose out of or
was based upon information regarding such Holder or its plan of distribution
which was furnished to the Company by such Holder for use therein, or (ii) the
failure by such Holder to deliver or cause to be delivered to any purchaser of
the shares covered by the Registration Statement the Prospectus contained in the
Registration Statement (as amended or supplemented, if applicable) furnished by
the Company to such Holder. Notwithstanding the foregoing, (A) in no event will
a Holder have any obligation under this Section 7(b) for amounts the Company
pays 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) and (B) the total amount for which a Holder shall
be liable under this Section 7(b) shall not in any event exceed the aggregate
net proceeds received by such Holder from the sale of the Holder's Registrable
Securities in such registration. The obligations of the Holders under this
Section 7(b) shall survive the completion of any offering of Registrable
Securities pursuant to a Registration Statement under this Agreement or
otherwise and shall survive the termination of this Agreement.
(c) Contribution. To the extent that the indemnification provided for in
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paragraph (a) or (b) of this Section 7 is held by a court of competent
jurisdiction to be unavailable to an indemnified party in respect of any
Damages, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, will contribute to the amount
paid or payable by such indemnified party as a result of such Damages (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand, and each Holder on the other, from the offering of
the Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Holders, on the
other, in connection with the statements or omissions which resulted in such
Damages, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Holders on the other hand will
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, however,
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that in no event shall the obligation of any indemnifying party to contribute
under this Section 7(c) exceed the amount that such indemnifying party would
have been obligated to pay by way of indemnification if the indemnification
provided for under paragraph (a) or (b) of this Section 7 had been available
under the circumstances.
If indemnification is available under paragraph (a) or (b) of this Section
7, the indemnifying parties will indemnify each indemnified party to the full
extent provided in such paragraphs without regard to the relative benefits to or
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 7(c).
The Company and each Holder agrees that it would not be just or equitable
if contribution pursuant to this Section 7(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein.
No indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent
misrepresentation.
(d) Notice. Promptly after receipt by an indemnified party under this
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Section 5 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to 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 the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the indemnified party, as
the case may be; provided, however, that an indemnified party shall have the
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right to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the indemnified party
and 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 Company shall pay
reasonable fees for only one separate legal counsel for the Holders. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the indemnified party under this Section 7, except to
the extent that the indemnifying party is prejudiced in its ability to defend
such action.
Section 8. Rule 144. The Company will use its best efforts to file in a
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timely manner all reports and other documents required to be filed by it under
the Securities Act and the Exchange Act and will use its best efforts to make
and keep public information available (as defined under Rule 144 under the
Securities Act) at all times from and after 90 days following the effective date
of the Initial Public Offering. Upon the request of any Holder, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
Section 9. Covenants of Holders.
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(a) Each Holder will furnish to the Company such information regarding such
Holder and such Holder's intended method of distribution of the Registrable
Securities as the Company may from time to time reasonably request in writing in
order to comply with the Securities Act and the provisions of this Agreement.
(b) Each Holder will, to the extent required by the Securities Act, deliver
or cause delivery of the Prospectus contained in a Registration Statement to any
purchaser of such Holder's Registrable Securities covered by such Registration
Statement.
(c) Each Holder will notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by the Holder to the
Company or of the occurrence of any event, in either case as a result of which
any Prospectus contains or would contain an untrue statement of a material fact
regarding the Holder or the Holder's intended method of distribution of the
Registrable Securities or omits or would omit to state any material fact
regarding the Holder or the Holder's intended method of distribution of the
Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and promptly furnish to the Company any additional information required to
correct and update any previously furnished information or required so that the
Prospectus will not contain, with respect to the Holder or the Holder's intended
method of distribution of the Registrable Securities, 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 in light of the
circumstances then existing.
(d) Each Holder whose Registrable Securities are covered by a Registration
Statement filed pursuant to Section 2 or 3 hereof will, if requested by the
Company in the case of a nonunderwritten offering (a "Nonunderwritten Offering"
and, together with an Underwritten Offering, an "Offering") or if requested by
the managing underwriter(s) in an Underwritten Offering, not effect any public
sale or distribution of any of any securities of the Company of any class
included in such Offering, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Offering), during the 15-day
period prior to, and during the 180-day period (or such longer period as may be
required by the managing underwriter(s)) beginning on, the date of pricing of
each Offering, to the extent timely notified in writing by the Company or the
managing underwriter(s).
Section 10. Miscellaneous.
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(a) Amendments and Waivers. The provisions of this Agreement, including
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this Section 10(a), may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof will not be effective, unless
approved in writing by the Company and Holders of a majority in interest of the
Registrable Securities then outstanding. The failure of any party to enforce
any of the provisions of this Agreement will in no way be construed as a waiver
of such provisions and will not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
(b) Notices. All notices and other communications provided for or
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permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by facsimile, registered or certified mail
(return receipt requested), postage prepaid or courier or overnight delivery
service to the Company at the following address and to each Holder at the
address set forth below such Holder's signature to this Agreement (or at such
other address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof),
and further provided that in case of directions to
amend the Registration Statement pursuant to Section 9, a Holder must confirm
such notice in writing by overnight express delivery with confirmation of
receipt:
If to the Company: c-quential, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: President
Facsimile No.:
with a copy to: ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., P.C.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to any Holder, to: The last address (or facsimile number)
for such Person set forth in the records
of the Company.
All such notices and other communications will (i) if delivered personally
to the address as provided in this Section 10(b), be deemed given upon delivery,
(ii) if delivered by facsimile transmission to the facsimile number as provided
in this Section 10(b), be deemed given upon receipt of confirmation, (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 10(b), be deemed given on the earlier of the third full Business
Day following the day of mailing or upon receipt, and (iv) if delivered by
overnight courier to the address provided in this Section 10(b), be deemed given
on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt.
In addition to the manner of notice permitted above, notices given pursuant to
Sections 1 and 6 hereof may be effected telephonically and confirmed in writing
thereafter in the manner described above.
(c) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors, assigns and transferees of each of the
parties from ADL or a subsequent Holder shall be entitled to the benefits of and
bound by the obligations under this Agreement only upon execution and delivery
by such transferee to the Company of a joinder agreement reasonably satisfactory
to the Company stating that such transferee agrees to be bound by the terms of
this Agreement as a "Holder."
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed will be deemed to be an original and all of which taken
together will constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
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reference only and will not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement will be governed by and construed in
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accordance with the laws of the State of Delaware without regard to principles
of conflicts of law.
(g) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein will not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
will be enforceable to the fullest extent permitted by law.
(h) Entire Agreement. This Agreement is intended by the parties as a final
----------------
expression of their agreement and is intended to be the complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
(i) Dispute Resolution. All disputes, controversies or claims between ADL
------------------
and the Company arising out of or relating to this Agreement shall be resolved
in accordance with the provisions of the Reorganization Agreement relating to
dispute resolution.
(j) Remedies. In the event of a breach by any party of its obligations
--------
under this Agreement, any party injured by such breach, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.
[End of Text]
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first set forth above.
C-QUENTIAL, INC.
____________________________________
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, INC.
_____________________________________
Name:
Title: