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EXHIBIT 10.3
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
among
▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.
and its Stockholders
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Dated as of June 16, 1999
and effective as set forth herein
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TABLE OF CONTENTS
PAGE NO.
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SECTION 1. Definitions.....................................................................................1
SECTION 2. Securities Subject to this Agreement............................................................2
(a) Registrable Securities..........................................................................2
(b) Holders of Registrable Securities...............................................................2
SECTION 3. Demand Registration.............................................................................3
(a) Request for Demand Registration.................................................................3
(b) Company Obligation to Register..................................................................3
(c) Underwriting Procedures.........................................................................4
(d) Selection of Underwriters.......................................................................4
SECTION 4. Piggy-Back Registration.........................................................................4
SECTION 5. Holdback Agreements.............................................................................5
(a) Restrictions on Public Sale by Holders..........................................................5
(b) Restrictions on Public Sale by the Company......................................................5
SECTION 6. Registration Procedures.........................................................................5
(a) Obligations of the Company......................................................................5
(b) Seller Information..............................................................................8
(c) Notice to Discontinue...........................................................................9
SECTION 7. Registration Expenses...........................................................................9
SECTION 8. Indemnification; Contribution..................................................................10
(a) Indemnification by the Company.................................................................10
(b) Indemnification by Holders.....................................................................10
(c) Conduct of Indemnification Proceedings.........................................................10
(d) Contribution...................................................................................11
(e) Survival.......................................................................................11
SECTION 9. Rules 144 and 144A.............................................................................12
SECTION 10. Limitation on Registration Rights of Others....................................................13
SECTION 11. Miscellaneous..................................................................................13
(a) Recapitalizations, Exchanges, Etc..............................................................13
(b) No Inconsistent Agreements.....................................................................13
(c) Remedies.......................................................................................13
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(d) Amendments and Waivers.........................................................................13
(e) Notices........................................................................................13
(f) Successors and Assigns.........................................................................14
(g) Effectiveness..................................................................................14
(h) Counterparts...................................................................................14
(i) Headings.......................................................................................14
(j) Governing Law..................................................................................14
(k) Severability...................................................................................14
(l) Entire Agreement...............................................................................15
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is dated as of June 16, 1999, but effective as set forth in
Section 11(g) below, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇, INC., a Delaware corporation
(the "Company"), and its Stockholders listed on the signature pages hereto
(individually, a "Stockholder" and collectively, the "Stockholders").
Statement of Purpose
The Stockholders are the holders of all of the outstanding capital
stock of the Company described on Schedule 1 hereto. The Company has agreed to
provide registration rights with respect to the Registrable Securities (as
hereinafter defined) as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. Definitions. For the purposes of this Agreement, in
addition to the terms defined elsewhere in this Agreement, the following terms
have the meanings set forth below:
"Approved Underwriter" shall have the meaning assigned thereto in
Section 3(d).
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means (a) the common stock of the Company, par value
$0.01 per share and (b) any other capital stock into which such stock is
reclassified or reconstituted.
"Company Underwriter" shall have the meaning assigned thereto in
Section 4.
"Demand Registration" means a demand registration requested by the
holders of Registrable Securities pursuant to Section 3.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders' Counsel" shall have the meaning assigned thereto in Section
6(a)(i).
"Inspector" shall have the meaning assigned thereto in Section
6(a)(viii).
"Kinder" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and his assignees pursuant to this
Agreement.
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"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Associates, Inc. and its assignees pursuant to
this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by
merger or otherwise) of such entity.
"Public Offering" means a public offering of the Common Stock pursuant
to a registration statement declared effective under the Securities Act.
"Records" shall have the meaning assigned thereto in Section
6(a)(viii).
"Registrable Securities" means all shares of Common Stock now or
hereafter acquired by any party hereto (including pursuant to Section 11(f),
but excluding the Company) or his, her or its successors or assigns, whether
pursuant to conversion or exercise of securities convertible into Common Stock
or options, warrants or other rights to subscribe for Common Stock or
otherwise, and any other common equity securities of the Company issued in
exchange for, upon a reclassification of, or in a distribution with respect to,
the Common Stock.
"Registration Expenses" shall have the meaning assigned thereto in
Section 7.
"Requesting Holders" shall have the meaning assigned thereto in
Section 3(a).
"Securities Act" means the Securities Act of 1933, as amended.
SECTION 2. Securities Subject to this Agreement.
(a) Registrable Securities. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been declared
effective under the Securities Act by the Commission and such Registrable
Securities have been disposed of pursuant to such effective registration
statement or (ii) the entire amount of Registrable Securities proposed to be
sold by a party hereto in a single sale are or, in the opinion of counsel
reasonably satisfactory to the Company, may be distributed to the public in
such single sale pursuant to Rule 144 (or any successor provision then in
force) under the Securities Act.
(b) Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record
Registrable Securities, or holds an option, warrant or other right to purchase,
or a security convertible into, Registrable Securities whether or not such
acquisition or conversion has actually been effected. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable
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Securities, the Company may act upon the basis of the instructions, notice or
election received from the registered owner of such Registrable Securities.
Registrable Securities issuable upon exercise of an option, warrant or other
right or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
SECTION 3. Demand Registration.
(a) Request for Demand Registration. At any time after the Company has
qualified for Form S-3 (or any successor form), (i) the holders of a majority
of the Registrable Securities then outstanding (excluding any Registrable
Securities owned by Kinder or ▇▇▇▇▇▇) or (ii) Kinder or ▇▇▇▇▇▇ (in either case
of clause (i) or (ii), the "Requesting Holders") may make a written request for
registration of Registrable Securities under the Securities Act, and under the
securities or blue sky laws of any jurisdiction reasonably designated by the
Requesting Holders (subject to the limitations in Section 6(a) (iv); provided,
that (1) subject to Section 3(c), the Company will not be required to effect
more than two registrations under each of clause (i) and (ii) pursuant to this
Section 3 (a), (2) the Company will not be required to effect any such
registration within a period beginning on the effective date of a registration
statement filed by the Company on its behalf covering a public offering of its
Common Stock and ending on the later of (A) 180 days thereafter and (B) the
expiration of any lock-up period required by the underwriters in connection
therewith and (3) the Company may, if the Board of Directors determines in the
exercise of its reasonable judgment that to effect such Demand Registration at
such time would have an adverse effect on the Company, defer such Demand
Registration for a single period not to exceed 90 days. The Company shall
exercise reasonable good faith efforts to qualify to register Registrable
Securities on Form S-3 (or any successor form) as soon as such registration is
available after the Company's initial Public Offering.
(b) Company Obligation to Register. Each request for a Demand
Registration pursuant to Section 3(a) shall specify the amount of the
Registrable Securities proposed to be sold, the intended method of disposition
thereof and the jurisdictions in which registration is reasonably desired. Upon
a request for a Demand Registration, the Company shall promptly and in any
event at least 30 days prior to the filing date give notice of such request to
all other holders of Registrable Securities. Such other holders shall, subject
to Section 3(c), be entitled to participate in such registration on the same
basis as the Requesting Holders; provided that such holders notify the Company
of their desire to be included in the registration statement within 10 days
after receipt of such notice from the Company. A registration shall not
constitute a Demand Registration until it has become effective and remains
continuously effective for a period of not less than six months or such shorter
period which will terminate when all Registrable Securities covered by such
Registration Statement (i) have been sold (but not before the expiration of the
90-day period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, if applicable), or (ii) may, in the opinion of counsel reasonably
satisfactory to the Company, be distributed to the public in a single sale
pursuant to Rule 144 (or any successor provision then in force) under the
Securities Act. In any registration initiated as a Demand Registration, the
Company shall pay all Registration Expenses in connection therewith, whether or
not such Demand Registration becomes effective, unless such Demand Registration
does not become effective due to the actions or inactions of the holders of the
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Registrable Securities included in such Registration Statement, in which case
such holders shall be responsible for the Registration Expenses.
(c) Underwriting Procedures. If the Requesting Holders so elect, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of a firm commitment underwritten offering and the
managing underwriter or underwriters selected for such offering shall be the
Approved Underwriter selected in accordance with Section 3(d). In such event,
if the Approved Underwriter advises the Company, which advice shall be
confirmed in writing, that in its opinion marketing considerations require a
limitation on the number of securities to be sold, the Company shall include in
such registration only the number of Registrable Securities which, in the good
faith opinion of such Underwriter, can be sold, selected in the following
order:
(i) in the case of Section 3(a)(i), first, the Registrable
Securities requested to be included by the holders of Registrable Securities
(other than Kinder and ▇▇▇▇▇▇), pro rata, based on the number of Registrable
Securities owned by each such Person; and second, the Registrable Securities
requested to be included by Kinder and ▇▇▇▇▇▇, pro rata, based on the number of
Registrable Securities owned by each such Person.
(ii) in the case of Section 3(a)(ii), first, the Registrable
Securities requested to be included by Kinder and ▇▇▇▇▇▇, pro rata, based on
the number of Registrable Securities owned by each such Person; and second, the
Registrable Securities requested to be included by the holders of Registrable
Securities (other than Kinder and ▇▇▇▇▇▇), pro rata, based on the number of
Registrable Securities owned by each such Person.
(d) Selection of Underwriters. In connection with requesting a Demand
Registration of Registrable Securities pursuant to Section 3(a), the Company
shall select a managing underwriter or underwriters (the "Approved
Underwriter"); provided, that the Approved Underwriter shall, in any case, be
reasonably acceptable to the Requesting Holders.
SECTION 4. Piggy-Back Registration. At any time after the initial
Public Offering of the Company, if the Company proposes to file a registration
statement under the Securities Act with respect to an offering of Common Stock
by the Company for its own account, or an offering of Common Stock for the
account of any stockholder of the Company or any group of such stockholders
(other than a registration statement on Form S-4 or S-8 or any successor forms
or any other forms not available for registering capital stock for sale to the
public), then the Company shall give notice of such proposed filing to each
holder of Registrable Securities at least 30 days before the anticipated filing
date, and such notice shall describe in detail the proposed registration and
distribution (including whether the offering will be underwritten and those
jurisdictions where registration under the securities or blue sky laws is
intended) and offer such holders the opportunity to register the number of
Registrable Securities as each such holder may request. The Company shall use
its best efforts, within 10 days of the notice provided for in the preceding
sentence, to cause the managing underwriter or underwriters of a proposed
underwritten offering (the "Company Underwriter") to permit the holders of
Registrable Securities who have requested to participate in the registration
for such offering to include such Registrable Securities in such offering on
the same
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terms and conditions as the securities of the Company included therein,
including execution of an underwriting agreement in customary form.
Notwithstanding the foregoing, if the Company Underwriter delivers a written
opinion to the holders of Registrable Securities that marketing considerations
require a limitation on the number of securities to be sold, then the amount of
securities in excess of the amount to be registered for sale by the Company to
be offered for the account of holders of Registrable Securities requesting
registration shall be reduced pro rata based on the Registrable Securities held
by each such holder, to the extent necessary to reduce the total securities to
be included in the offering to the amount recommended by the Company
Underwriter. The Company shall bear all Registration Expenses in connection
with any registration pursuant to this Section 4.
SECTION 5. Holdback Agreements.
(a) Restrictions on Public Sale by Holders. To the extent not
inconsistent with applicable law, each holder of Registrable Securities agrees
not to effect any public sale or distribution of any Registrable Securities or
of any securities convertible into or exchangeable or exercisable for such
Registrable Securities, including a sale pursuant to Rule 144 under the
Securities Act, during the period beginning on the filing of such registration
statement and ending on the later of (i) 180 days after the effective date of
such registration statement or the commencement of a public distribution of the
Registrable Securities pursuant to such registration statement or (ii) the
expiration of any lock-up period required by the underwriters, if any, of such
offering.
(b) Restrictions on Public Sale by the Company. The Company agrees not
to effect any public sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on Form S-4 or S-8 or any successor to such
forms or any other forms not available for registering capital stock for sale
to the public) during the period beginning on the filing of any registration
statement in which the holders of Registrable Securities are participating and
ending on the later of (i) 90 days after the effective date of any such
registration statement and (ii) the expiration of any lock-up period required
by the underwriters, if any, of such offering.
SECTION 6. Registration Procedures.
(a) Obligations of the Company. Whenever registration of Registrable
Securities has been requested pursuant to Sections 3 or 4, the Company shall
use its reasonable best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method of distribution
thereof as quickly as practicable, and in connection with any such request, the
Company shall, as expeditiously as possible:
(i) prepare and file with the Commission (as promptly as
practicable, but in any event not later than 90 days after receipt of a request
to file a registration statement with respect to Registrable Securities,
subject to extension as provided in Section 3(a)(iii)) a registration statement
on any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the sale
of such Registrable Securities
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in accordance with the intended method of distribution thereof, and use its
best efforts to cause such registration statement to become effective;
provided, that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall (A) provide counsel
selected by the holders of a majority of the Registrable Securities being
registered in such registration ("Holders' Counsel") with an adequate and
appropriate opportunity to participate in the preparation of such registration
statement and each prospectus included therein (and each amendment or
supplement thereto) to be filed with the Commission, which documents shall be
subject to the review of Holders' Counsel, and (B) notify the Holders' Counsel
and each seller of Registrable Securities of any stop order issued or, to the
Company's knowledge, threatened by the Commission and take all reasonable
action required to prevent the entry of such stop order or to remove it if
entered;
(ii) (A) 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
effective for a period of not less than six months or such shorter period which
will terminate when all Registrable Securities covered by such registration
statement (I) have been sold (but not before the expiration of the 90-day
period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, if applicable), or (II) may, in the opinion of counsel reasonably
satisfactory to the Company, be distributed to the public in a single sale
pursuant to Rule 144 (or any successor provision then in force) under the
Securities Act, and (B) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(iii) as soon as reasonably possible, furnish to each seller
of Registrable Securities, prior to filing a registration statement, copies of
such registration statement as it is proposed to be filed, and thereafter such
number of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto), the prospectus included
in such registration statement (including each preliminary prospectus) and such
other documents as each such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller;
(iv) use its reasonable best efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller of Registrable Securities reasonably requests,
and to continue such qualification in effect in such jurisdictions for as long
as is permissible pursuant to the laws of such jurisdictions, or for as long as
any such seller requests or until all of such Registrable Securities are sold,
whichever is shortest, and do any and all other acts and things which may be
reasonably necessary or advisable to enable any such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; provided, that the Company shall not be obligated to effect, or take
any action to effect, any such registration or qualification in any particular
jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration or qualification
unless the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act or applicable rules or
regulations thereunder;
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(v) use its reasonable best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers of Registrable Securities to consummate the disposition of such
Registrable Securities;
(vi) notify each seller of Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement
contains 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 under which they were made, and
the Company shall promptly prepare a supplement or amendment to such prospectus
and furnish to each seller a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, after delivery to
the purchasers of such Registrable Securities, such prospectus shall not
contain an 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
not misleading in light of the circumstances under which they were made;
(vii) enter into and perform customary agreements (including
an underwriting agreement in customary form with the Approved Underwriter or
Company Underwriter, if any, selected as provided in Sections 3 or 4) and take
such other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities;
(viii) make available for inspection by any seller of
Registrable Securities, any managing underwriter participating in any
disposition pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or any managing
underwriter (each, an "Inspector" and collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such registration statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (A)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in the registration statement or to confirm that no such
misstatement or omission has been made, (B) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (C) the information in such Records has been made generally
available to the public or is required to be filed with the Commission. Each
seller of Registrable Securities agrees that it shall, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;
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(ix) if such sale is pursuant to an underwritten offering,
obtain a "cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by "cold comfort" letters as Holders' Counsel or the managing
underwriters reasonably request;
(x) furnish, at the request of any seller of Registrable
Securities on the date such securities are delivered to the underwriters for
sale pursuant to such registration or, if such securities are not being sold
through underwriters, on the date the registration statement with respect to
such securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to
the underwriters, if any, and to the seller making such request, covering such
legal matters with respect to the registration in respect of which such opinion
is being given as such seller or underwriters may reasonably request and are
customarily included in such opinions;
(xi) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable but no later than 15
months after the effective date of the registration statement, an earnings
statement covering a period of 12 months beginning after the effective date of
the registration statement, in a manner which satisfies the provisions of
Section 11(a) of the Securities Act;
(xii) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed; provided, that the applicable listing requirements are satisfied;
(xiii) keep each seller of Registrable Securities advised in
writing as to the initiation and progress of any registration under Sections 3
or 4;
(xiv) provide officers' certificates and other customary
closing documents;
(xv) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD; and
(xvi) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby and cooperate with the holders of such Registrable Securities to
facilitate the disposition of such Registrable Securities pursuant thereto.
(b) Seller Information. The Company shall be entitled to require each
seller of Registrable Securities as to which any registration is being effected
to furnish to the Company such information regarding the distribution of such
securities as the Company may from time to time reasonably request in writing.
In addition, each seller shall be required to enter into and perform customary
agreements (including an underwriting agreement in customary form with the
Approved
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Underwriter or Company Underwriter, if any, selected as provided in Sections 3
or 4) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities.
(c) Notice to Discontinue. Each holder of Registrable Securities
agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 6(a) (vi), such holder shall
forthwith discontinue disposition of 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 6(a)(vi) and, if so directed by the Company, such holder shall 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 which is current at the time of receipt of such notice.
If the Company shall give any such notice, the Company shall extend the period
during which such registration statement shall be maintained effective pursuant
to this Agreement (including without limitation the period referred to in
Section 6(a)(ii)) by the number of days during the period from and including
the date of the giving of such notice pursuant to Section 6(a)(vi) to and
including the date when the holder shall have received the copies of the
supplemented or amended prospectus contemplated by and meeting the requirements
of Section 6(a)(vi).
SECTION 7. Registration Expenses.
(a) The Company shall pay all of its expenses (other than underwriting
discounts and commissions) arising from or incident to the performance of, or
compliance with, this Agreement, including without limitation, (i) Commission,
stock exchange and NASD registration and filing fees, (ii) all fees and
expenses incurred in complying with securities or blue sky laws (including
reasonable fees, charges and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) all printing,
engraving, messenger and delivery expenses, and (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including without limitation any fees and expenses in
connection with any "cold comfort" letters and any special audits incident to
or required by any registration or qualification) regardless of whether such
registration statement is declared effective, unless such registration
statement does not become effective due to the actions or inactions of the
holders of the Registrable Securities included in such registration statement.
(b) The Company will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which securities of
the same class are then listed or the qualification for trading of the
securities to be registered in each inter-dealer quotation system in which
securities of the same class are then traded, and rating agency fees.
(c) In connection with each registration requested pursuant to Section
3, the Company will pay the reasonable fees and disbursements of the Holders'
Counsel.
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SECTION 8. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify,
to the full extent permitted by law, each holder of Registrable Securities, its
officers, directors, partners, employees and agents and each Person who
controls (within the meaning of the Securities Act or the Exchange Act) such
holder from and against any and all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation and, subject to Section
8(c), reasonable fees, disbursements and other charges of legal counsel)
arising out of or based upon any untrue, or alleged untrue, statement of a
material fact contained in any registration statement, prospectus or
preliminary prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or arising out of or based
upon 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, except insofar as
the same are caused by or contained in any information furnished in writing to
the Company by such holder expressly for use therein.
(b) Indemnification by Holders. In connection with any registration
statement in which a holder of Registrable Securities is participating pursuant
to Sections 3 or 4, each such holder shall furnish to the Company in writing
such information with respect to such holder as the Company may reasonably
request or as may be required by law for use in connection with any such
registration statement or prospectus and each holder agrees to indemnify, to
the extent permitted by law, the Company, any underwriter retained by the
Company and their respective directors, officers, employees and each Person who
controls the Company or such underwriter (within the meaning of the Securities
Act and the Exchange Act) to the same extent as the foregoing indemnity from
the Company to the holders, but only with respect to any such information
furnished in writing by such holder expressly for use in such registration
statement. Notwithstanding the provisions of this Section 8(b), a holder of
Registrable Securities shall not be required to pay any indemnification in an
amount in excess of the net proceeds received by such holder in the offering to
which such registration statement relates.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the "Indemnified Party") agrees to give prompt
notice to the indemnifying party (the "Indemnifying Party") after the receipt
by the Indemnified Party of any notice of the commencement of any action, suit,
proceeding or investigation or threat thereof made in writing for which the
Indemnified Party intends to claim indemnification or contribution pursuant to
this Agreement; provided, that the failure so to notify the Indemnifying Party
shall not relieve the Indemnifying Party of any liability that it may have to
the Indemnified Party hereunder, unless (and then solely to the extent that)
the Indemnifying Party is materially prejudiced thereby. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to
the extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate legal counsel in any
such action and participate in the defense thereof, but the fees, disbursements
and other charges of such legal counsel shall be paid by the Indemnified Party
-10-
14
unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying
Party fails to assume the defense of such action with legal counsel reasonably
satisfactory to the Indemnified Party in its reasonable judgment or (iii) the
named parties to any such action (including any impleaded parties) have been
advised by such legal counsel that either (A) representation of such
Indemnified Party and the Indemnifying Party by the same legal counsel would be
inappropriate under applicable standards of professional conduct or (B) there
may be one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party. In either of such
cases the Indemnifying Party shall not have the right to assume the defense of
such action on behalf of such Indemnified Party. No Indemnifying Party shall be
liable for any settlement entered into without its written consent, which
consent shall not be unreasonably withheld, unless such settlement contains an
unconditional release of the Indemnified Party.
(d) Contribution. If the indemnification provided for in this Section
8 from the Indemnifying Party is unavailable to an Indemnified Party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault and the relative
benefit of the Indemnifying Party and Indemnified Party in connection with the
actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 8(a), 8(b)
and 8(c), any fees, charges or expenses (including reasonable fees,
disbursements and other charges of legal counsel) reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 8(d), a holder of
Registrable Securities shall not be required to contribute any amount in excess
of the amount by which the net proceeds received by such holder in the offering
to which such registration statement relates exceeds the amount of any damages
that such holder has otherwise been required to pay. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person.
(e) Survival. The indemnity and contribution covenants contained in
this Section 8 shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of a holder or any person
controlling a holder, (ii) any sale of any Registrable Securities pursuant
-11-
15
to this Agreement and receipt by the holders of the proceeds thereof, or (iii)
any termination of this Agreement for any reason, including after the initial
filing of the registration statement to which these indemnity and contribution
covenants relate.
SECTION 9. Rules 144 and 144A. The Company covenants that it shall
duly and timely file any reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by
the Commission thereunder; and that it shall take such further action as each
holder of Registrable Securities may reasonably request (including providing
any information necessary to comply with Rules 144 and 144A under the
Securities Act), all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 or Rule 144A
under the Securities Act, as such rules may be amended from time to time, or
any similar rules or regulations hereafter adopted by the Commission. The
Company shall, upon the request of any holder of Registrable Securities,
deliver to such holder a written statement as to whether it has complied with
such requirements. Without limiting the foregoing, the Company agrees that:
(a) it will, if required by law, maintain a registration statement
(containing such information and documents as the Commission shall specify)
with respect to the Common Stock under Section 12 of the Exchange Act and will
timely file such information, documents and reports as the Commission may
require or prescribe for companies whose stock has been registered pursuant to
said Section 12;
(b) it will, if a registration statement with respect to the Common
Stock under Section 12 is effective, or if required by Section 15(d) of the
Exchange Act, make whatever filings with the Commission or otherwise make
generally available to the public such financial and other information as may
be necessary to enable the holders of Registrable Securities to be permitted to
sell shares of Common Stock pursuant to the provisions of Rule 144 or 144A
promulgated under the Securities Act (or any successor rule or regulation
thereto); and
(c) it will, at any time when any holder of Registrable Securities
desires to make sales of any Registrable Securities in reliance on Rule 144A
under the Securities Act (or any successor rule or regulation), provide such
holder and any prospective purchaser therefrom with the information required by
Rule 144A and otherwise cooperate with the holder in connection with such sale.
The Company represents and warrants that any registration statement or
any information document or report filed with the Commission in connection with
the foregoing or any information so made public shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements contained therein,
in light of the circumstances under which they were made, not misleading. The
Company agrees to indemnify and hold harmless (or to the extent the same is not
enforceable, make contribution to) the seller of Registrable Securities, its
partners, officers, directors, employees and agents and each broker, dealer or
underwriter (within the meaning of the Securities Act) acting for any such
seller in connection with any offering or sale by such seller of Registrable
Securities or any person, firm
-12-
16
or corporation controlling (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) such seller and any such
broker, dealer or underwriter from and against any and all losses, claims,
damages, liabilities or expenses (or actions in respect thereof) arising out of
or resulting from any breach of the foregoing representation or warranty, all
on terms and conditions comparable to those set forth in Section 8.
SECTION 10. Limitation on Registration Rights of Others. The Company
represents and warrants that it has not granted to any Person the right to
request or require the Company to register any securities issued by the
Company. The Company covenants and agrees that, so long as any Person holds any
Registrable Securities in respect of which any registration rights provided for
in Section 3 remain in effect, the Company will not, directly or indirectly,
grant to any Person or agree to or otherwise become obligated to grant any
registration rights with priority over or that conflict with the registration
rights granted herein.
SECTION 11. Miscellaneous.
(a) Recapitalizations, Exchanges, Etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Common Stock, to any and all shares of capital stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for or in
substitution of, the Common Stock and shall be appropriately adjusted for any
stock dividends, splits, reverse splits, combinations, recapitalizations and
the like occurring after the date hereof.
(b) No Inconsistent Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the designated holders of the Registrable Securities in this
Agreement.
(c) Remedies. The holders of the Registrable Securities, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages, shall be entitled to specific performance of their rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the prior written consent of the holders of at
least 85% of the Registrable Securities.
(e) Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopy, recognized
overnight courier service or personal delivery.
-13-
17
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five business
days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged if telecopied to the following addresses:
if to the Company:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Stockholders, as set forth on the signature pages hereto.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties and
the registration rights and the other obligations of the Company contained in
this Agreement shall with respect to any Registrable Security be automatically
transferred to any subsequent holder of Registrable Securities (excluding any
person who acquires such securities in a transaction with respect to which a
registration statement under the Securities Act is effective at the time or
pursuant to a sale complying with Rule 144 under the Securities Act).
Notwithstanding any transfer of such rights, all of the obligations of the
Company hereunder shall survive any such transfer and shall continue to inure
to the benefit of all transferees.
(g) Effectiveness. This Agreement shall be effective upon the
Company's Registration Statement on Form S-1 filed on May 10, 1999 or any
amendment thereto being declared effective by the Securities and Exchange
Commission.
(h) 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 shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law of such state.
(k) Severability. If 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
-14-
18
remaining provisions hereof shall not be in any way impaired, it being intended
that all of the rights and privileges of the holders of Registrable Securities
shall be enforceable to the fullest extent permitted by law.
(l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a 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.
[SIGNATURE PAGES TO FOLLOW]
-15-
19
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered under seal as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
-16-
20
FIRST UNION CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Partner
One First Union Center
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
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21
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇. ▇▇▇▇▇▇ HAUPTFUHRER
-------------------------------------------
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ III
-------------------------------------------
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ III
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
-18-
22
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy:
-19-
23
SCHEDULE 1
Ownership of Shares
Shares of Shares of
Stockholder Common Stock Non-Voting
----------- ------------ Common Stock
------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 19,319,036
▇▇▇▇▇▇ Associates, Inc. 7,291,113
First Union Corporation 1,435,209 3,476,671
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 126,818
▇▇▇ ▇. ▇▇▇▇▇▇▇ 182,494
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 129,911
▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 126,818
▇▇▇▇▇ ▇. ▇▇▇▇ 117,539
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ 117,539
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ III 117,539
▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 98,980
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 117,539
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 92,794
---------- ---------
Total 29,273,329 3,476,671
========== =========
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