EXHIBIT 10.7
================================================================================
WARRANT REGISTRATION RIGHTS AGREEMENT
Dated as of May 15, 1996
By and Among
DIVA SYSTEMS CORPORATION,
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
and
TORONTO DOMINION SECURITIES (USA) INC.
================================================================================
TABLE OF CONTENTS
-----------------
PAGE
Section 1. Definitions...................................................... 1
Section 2. Registration Rights.............................................. 6
2.1 (a) Demand Registration After Public Equity Offering............ 6
(b) Effective Registration...................................... 6
(c) Restrictions on Sale by Holders............................. 7
(d) Underwritten Registrations.................................. 7
(e) Expenses.................................................... 8
(f) Priority in Demand Registration............................. 8
(g) Shelf Registration.......................................... 8
2.2 (a) Piggy-Back Registration..................................... 10
(b) Priority in Piggy-Back Registration......................... 11
2.3 Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants................................ 13
2.4 Restrictions on Sale by the Company and Others................... 14
2.5 Rule 144 and Rule 144A........................................... 15
2.6 Registration on Form S-3......................................... 15
Section 3. "Market Stand-Off" Agreement..................................... 16
Section 4. Registration Procedures.......................................... 16
Section 5. Indemnification and Contribution................................. 22
Section 6. Miscellaneous.................................................... 25
(a) No Inconsistent Agreements.................................. 25
(b) Amendments and Waivers...................................... 25
(c) Notices..................................................... 25
(d) Successors and Assigns...................................... 26
(e) Counterparts................................................ 26
(f) Headings.................................................... 26
(g) Governing Law; Jurisdiction................................. 26
(h) Severability................................................ 26
(i) Entire Agreement............................................ 26
(j) Attorneys' Fees............................................. 27
(k) Securities Held by the Company or Its Affiliates............ 27
(l) Remedies.................................................... 27
ii
WARRANT REGISTRATION RIGHTS AGREEMENT
THIS WARRANT REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of May 15, 1996, by and among DIVA SYSTEMS CORPORATION, a
Delaware corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇ INC. and TORONTO DOMINION
SECURITIES (USA) INC., (each a "Purchaser" and collectively, the "Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated May 24,
1996, among the Company and the Purchasers (the "Purchase Agreement"), relating
to, among other things, the sale by the Company to the Purchasers of an
aggregate of 47,000 Units, each Unit consisting of $1,000 principal amount
(subject to increase pursuant to Section 3.07(c) of the Indenture) at maturity
of 13% Subordinated Discount Notes due May 15, 2006 and 47,000 Warrants, each
initially exercisable for 20.2 shares of Common Stock, par value $.001 per
share, of the Company. In order to induce the Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide to the Purchasers and the
Holders (as defined herein), among other things, the registration rights for the
Warrant Shares (as defined herein) set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the obligations of the
Purchasers under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following defined
terms shall have the following meanings:
"Advice" has the meaning ascribed to such term in the last paragraph of
Section 4 hereof.
"Affiliate" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent Person or such other Person,
as the case may be. For the purposes of this definition, the term
"control" when used with respect to any specified Person means the power to
direct or cause the direction of management or policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "affiliated," "controlling" and
"controlled" have meanings correlative of the foregoing. None of the
Purchasers or any of their Affiliates shall be deemed to be an Affiliate of
the Company or of any of its subsidiaries or Affiliates.
"Business Day" shall mean a day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations, or
other equivalents (however designated) of corporate stock of the Company,
including each class of common stock and preferred stock of the Company,
together with any warrants, rights, or options to purchase or acquire any
of the foregoing.
1
"Common Stock" shall mean the Common Stock, no par value per share, of
the Company.
"Company" shall have the meaning ascribed to that term in the preamble
of this Agreement and shall also include the Company's permitted successors
and assigns.
"Demand Registration" has the meaning ascribed to such term in Section
2.1(a) hereof.
"DTC" has the meaning ascribed to such term in Section 4(i) hereof.
"Effectiveness Date" shall mean, with respect to any Registration
Statement, the 60th day after the Filing Date thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Filing Date" shall mean (A) if no Registration Statement has been filed
by the Company pursuant to this Agreement, the 30th day after the Trigger
Date; provided, however, that if a Shelf Notice is given within 10 days of
-------- -------
the Filing Date, then the Filing Date with respect to the Initial Shelf
Registration shall be the 15th calendar day after the date of the giving of
such Shelf Notice; and (B) in each other case (which may be applicable
notwithstanding the consummation of an Exchange Offer), the 30th day after
the delivery of a Shelf Notice.
"Holder" shall mean each of the Purchasers, for so long as it owns any
Warrant Shares, and each of its successors, assigns and direct and indirect
transferees who become registered owners of such Warrant Shares.
"Included Securities" has the meaning ascribed to such term in Section
2.1(a) hereof.
"indemnified party" has the meaning ascribed to such term in Section
5(c) hereof.
"indemnifying party" has the meaning ascribed to such term in Section
5(c) hereof.
"Indenture" means the Indenture, of even date herewith, between the
Company and The Bank of New York as Trustee, pursuant to which the Notes
are issued.
"Initial Shelf Registration" has the meaning ascribed to such term in
Section 2(g)(i) hereof.
"Inspectors" has the meaning ascribed to such term in Section 4(a)
hereof.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required by law, regulation
or executive order to remain closed.
2
"Notes" means the aggregate of $47,000,000 principal amount at maturity
(subject to increase pursuant to Section 3.07(c) of the Indenture) of 13%
Subordinated Discount Notes due May 15, 2006 of the Company issued under
the Indenture.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Piggy-Back Registration" has the meaning ascribed to such term in
Section 2.2 hereof.
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any 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 all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"Public Equity Offering" means a primary public offering (whether or not
underwritten, but excluding any offering pursuant to Form S-4 or S-8 under
the Securities Act) of capital stock of the Company pursuant to an
effective registration statement under the Securities Act.
"Purchase Agreement" has the meaning ascribed to such term in the
preamble hereof.
"Purchasers" has the meaning ascribed to such term in the preamble
hereof.
"Registrable Securities" means any of (i) the Warrant Shares and (ii)
any other securities issued or issuable with respect to any Registrable
Securities by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise, unless, in each case, such Warrant Shares have
been offered and sold to the Holder pursuant to an effective Registration
Statement under the Securities Act declared effective prior to the
exercisability of the Warrants and such securities may be sold to the
public pursuant to Rule 144 without any restriction on the amount of
securities which may be sold by such Holder. As to any particular
Registrable Securities held by a Holder, such securities shall cease to be
Registrable Securities when (i) a Registration Statement with respect to
the offering of such securities by the Holder thereof shall have been
declared effective under the Securities Act and such securities shall have
been disposed of by such Holder pursuant to such Registration Statement,
(ii) such securities may at the time of determination be sold to the public
pursuant to Rule 144 without any restriction on the amount of securities
which may be sold by such Holder or Rule 144(k) (or any similar provision
then in force, but not Rule 144A) promulgated under the Securities Act
without the lapse of any further time or the satisfaction of any condition,
(iii) such securities shall have been otherwise transferred by such Holder
and new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company or its transfer
agent and subsequent disposition of such securities
3
shall not require registration or qualification under the Securities Act or
any similar state law then in force or (iv) such securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation, all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees
and expenses of compliance with securities or blue sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger, telephone and delivery expenses,
fees and disbursements of counsel for the Company and all independent
certified public accountants, the fees and disbursements of underwriters
customarily paid by issuers or sellers of securities (but not including any
underwriting discounts or commissions or transfer taxes, if any,
attributable to the sale of Registrable Securities by Holders of such
Registrable Securities) and other reasonable out-of-pocket expenses of
Holders (it being understood that Registration Expenses shall not include,
as to the fees and expenses of counsel, the fees and expenses of more than
one counsel for the Holders).
"Registration Statement" shall mean any appropriate registration
statement of the Company filed with the SEC pursuant to the Securities Act
which 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 contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Requisite Securities" shall mean a number of Registrable Securities
equal to not less than 25% of the Registrable Securities held in the
aggregate by all Holders; provided, however, that with respect to any
-------- -------
action to be taken at the request of the Holders of the Registrable
Securities prior to such time as the Warrants have expired pursuant to the
terms thereof and of the Warrant Agreement, each Warrant outstanding shall
be deemed to represent that number of Registrable Securities for which such
Warrant would be then exercisable (without giving effect to the Cashless
Exercise feature referred to in the Warrant Agreement).
"Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC providing for offers
and sales of securities made in compliance therewith resulting in offers
and sales by subsequent holders that are not affiliates of an issuer of
such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
"Rule 144A" shall mean Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other
than Rule 144) or regulation hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
4
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Selling Holder" shall mean a Holder who is selling Registrable
Securities in accordance with the provisions of Section 2.1 or 2.2.
"Shelf Notice" shall have the meaning ascribed to such term in Section
2(g)(i) hereof.
"Stockholder Rights Agreement" means the Stockholder Rights Agreement
amended and restated as of May 15, 1996 by and among the Company and the
other persons or entities party thereto, as amended or supplemented from
time to time.
"Trigger Date" means the earliest to occur of (i) the consummation of a
Public Equity Offering, (ii) the Company or any of its subsidiaries shall
effect any offering of debt securities and thereafter the Company shall be
subject to the reporting requirements of Section 13 or 15 of the Exchange
Act (whether pursuant to the Exchange Act or by contractual obligation) or
(iii) May 15, 1999; provided, however, that May 15, 1999 shall not be a
-------- -------
Trigger Date if, in the opinion of counsel to the Company (a copy of which
shall be delivered to the Holders not later than the 30th day after May 15,
1999), the Registrable Securities may on and after such date be sold to the
public pursuant to Rule 144(k) under the Securities Act (or any successor
rule) without the lapse of any further time or the satisfaction of any
conditions; provided, further, however, that if the opinion referred to in
-------- ------- -------
the parenthetical to this proviso is not delivered to the Holders on or
prior to the 30th day after May 15, 1999, then May 15, 1999 shall
nonetheless be a Trigger Date; provided, further, still, however, that if
-------- ------- ----- -------
such opinion is delivered prior to the Filing Date, then May 15, 1999 shall
then be deemed not to be a Trigger Date and no action arising therefrom
need be pursued.
"Warrant Agent" means The Bank of New York and any successor Warrant
Agent for the Warrants pursuant to the Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of May 15, 1996
between the Company and The Bank of New York, as warrant agent, as amended
or supplemented from time to time in accordance with the terms thereof.
"Warrants" means the warrants of the Company issued pursuant to the
Warrant Agreement.
"Warrant Share Prospectus" means the prospectus included in any Warrant
Share Registration Statement (including, without limitation, any prospectus
subject to completion and a prospectus that includes any 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 all other amendments and supplements to the Warrant Share Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Warrant Share
Prospectus.
5
"Warrant Share Registration Statement" has the meaning ascribed to that
term in Section 5(a) hereof.
"Warrant Shares" means the shares of Common Stock deliverable upon
exercise of the Warrants.
SECTION 2. REGISTRATION RIGHTS.
2.1 (a) Demand Registration After Public Equity Offering. At any time
------------------------------------------------
and from time to time after the earlier of the occurrence of a Public Equity
Offering and May 15, 2000, Holders owning, individually or in the aggregate, not
less than the Requisite Securities may make a written request for registration
under the Securities Act of their Registrable Securities (a "Demand
Registration"). Within 90 days of the receipt of such written request for a
Demand Registration, the Company shall file with the SEC and use its best
efforts to cause to become effective under the Securities Act a Registration
Statement with respect to such Registrable Securities. Any such request will
specify the number of Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. The Company shall give
written notice of such registration request to all other Holders of Registrable
Securities within 15 days after the receipt thereof. Within 20 days after
receipt by any Holder of Registrable Securities of such notice from the Company,
such Holder may request in writing that such Holder's Registrable Securities be
included in such Registration Statement and the Company shall include in such
Registration Statement the Registrable Securities of any such Holder requested
to be so included (the "Included Securities"). Each such request by such other
Holders shall specify the number of Included Securities proposed to be sold and
the intended method of disposition thereof. Subject to Sections 2.1(b) and
2.1(f) hereof, the Company shall be required to register Registrable Securities
pursuant to this Section 2.1(a) on a maximum of three separate occasions.
Subject to Section 2.1(f) hereof, no other securities of the Company except
(i) Registrable Securities held by any Holder, (ii) equity securities to be
offered and sold for the account of the Company and (iii) any equity securities
of the Company held by the parties to the Stockholder Rights Agreement or by any
Person having "piggy-back" registration rights pursuant to any contractual
obligation of the Company shall be included in a Demand Registration; provided,
--------
however, that no such securities for the account of the Company or any other
-------
person (other than the parties to the Stockholder Rights Agreement) shall be so
included unless, in connection with any underwritten offering, the managing
underwriter or underwriters confirm to the Holders of Registrable Securities to
be included in such Demand Registration that the inclusion of such other
securities will not be likely to affect the price at which the Registrable
Securities may be sold. The inclusion of any such securities for the account of
the Company or any other Person shall be on the same terms as that of the
Registrable Securities.
(b) Effective Registration. A Registration Statement will not be deemed
----------------------
to have been effected as a Demand Registration unless it has been declared
effective by the SEC and the Company has complied in a timely manner and in all
material respects with all of its obligations under this Agreement
6
with respect thereto; provided, however, that if, after such Registration
-------- -------
Statement has become effective, the offering of Registrable Securities pursuant
to such Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the SEC or any other governmental or
administrative agency or court that prevents, restrains or otherwise limits the
sale of Registrable Securities pursuant to such Registration Statement for any
reason not attributable to any Holder participating in such registration and
such Registration Statement has not become effective within a reasonable time
period thereafter (not to exceed 30 days), such Registration Statement will be
deemed not to have been effected. If (i) a registration requested pursuant to
this Section 2.1 is deemed not to have been effected or (ii) a Demand
Registration does not remain effective under the Securities Act until at least
the earlier of (A) an aggregate of 180 days after the effective date thereof or
(B) the consummation of the distribution by the Holders of all of the
Registrable Securities covered thereby, then such registration shall not count
towards determining if the Company has satisfied its obligation to effect three
Demand Registrations pursuant to this Section 2.1. For purposes of calculating
the 180-day period referred to in the preceding sentence, any period of time
during which such Registration Statement was not in effect shall be excluded.
The Holders of Registrable Securities shall be permitted to withdraw all or any
part of the Registrable Securities from a Demand Registration at any time prior
to the effective date of such Demand Registration.
(c) Restrictions on Sale by Holders. Each Holder of Registrable
-------------------------------
Securities whose Registrable Securities are covered by a Registration Statement
filed pursuant to this Section 2.1 and are to be sold thereunder agrees, if and
to the extent reasonably requested by the managing underwriter or underwriters
in an underwritten offering, not to effect any public sale or distribution of
Registrable Securities or of securities of the Company of the same class as any
securities included in such Registration Statement, including a sale pursuant to
Rule 144 (except as part of such underwritten offering), during the 30 day-
period prior to, and during the 120 day period beginning on, the closing date of
each underwritten offering made pursuant to such Registration Statement, to the
extent timely notified in writing by the Company or such managing underwriter or
underwriters.
The foregoing provisions of Section 2.1(c) shall not apply to any Holder of
Registrable Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement; provided, however, that any
-------- -------
such Holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of any
Registrable Securities commencing on the date of sale of such Registrable
Securities unless it has provided 45 days' prior written notice of such sale or
distribution to the underwriter or underwriters.
(d) Underwritten Registrations. If any of the Registrable Securities
--------------------------
covered by a Demand Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will manage
the offering will be selected by the Holders of not less than a majority of the
Registrable Securities to be sold thereunder and will be reasonably acceptable
to the Company.
7
No Holder of Registrable Securities may participate in any underwritten
registration pursuant to a Registration Statement filed under this Agreement
unless such Holder (a) agrees to (i) sell such Holder's Registrable Securities
on the basis provided in and in compliance with any underwriting arrangements
approved by the Holders of not less than a majority of the Registrable
Securities to be sold thereunder and (ii) comply with Rules 10b-6 and 10b-7
under the Exchange Act and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements; provided, however,
that no Holder of Registrable Securities shall be required to enter into a
custody or escrow agreement or power of attorney with respect to Registrable
Securities to be sold in connection with such underwriting arrangements.
(e) Expenses. The Company will pay all Registration Expenses in
--------
connection with the registrations requested pursuant to Sections 2.1 and 2.2
hereof. Each Holder of Registrable Securities shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to a Registration
Statement requested pursuant to this Section 2.1.
(f) Priority in Demand Registration. In a registration pursuant to
-------------------------------
Section 2.1 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders who have requested such Demand
Registration or who have sought inclusion therein that in such underwriter's or
underwriters' opinion the total number of securities which the Selling Holders
and any other Person desiring to participate in such registration intend to
include in such offering is such as to adversely affect the success of such
offering, including the price at which such securities can be sold, then the
Company will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration. In
such event, securities shall be registered in such registration in the following
order of priority: (i) first, the securities which have been requested to be
-----
included in such registration by the Holders of Registrable Securities pursuant
to this Agreement (ii) second, provided that no securities sought to be included
------
by the Holders of Registrable Securities have been excluded from such
registration, the securities of the other parties to the Stockholder Rights
Agreement, (iii) third, provided that no securities sought to be included by the
-----
Holders or the other parties to the Stockholder Rights Agreement have been
excluded from such registration, the securities of other Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments of
the Company (pro rata based on the amount of securities sought to be registered
by such Persons) and (iv) fourth, provided that no securities of any other
------
Person sought to be included therein have been excluded from such registration,
securities to be offered and sold for the account of the Company.
If any securities of a Holder have been excluded from a registration
statement pursuant to the provisions of the foregoing paragraph, then such
registration shall not count towards determining whether the Company has
satisfied its obligation to effect three Demand Registrations pursuant to
Section 2.1 hereof.
8
(g) Shelf Registration.
------------------
If, (x) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Company is not permitted to
register the Registerable Securities or (y) any holder of Registerable
Securities so requests, then the Company shall promptly deliver to the Holders
and the Trustee written notice thereof (a "Shelf Notice"), the Company shall
file a Shelf Registration (as defined below) on the following terms:
(i) Shelf Registration. The Company shall file with the SEC a
------------------
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registerable Securities (the "Initial Shelf
Registration") on or prior to the Filing Date. The Initial Shelf Registration
shall be on Form S-1 or another appropriate form permitting registration of such
Registerable Securities for resale by Holders in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Company shall not permit any securities other than the
Registerable Securities to be included in the Initial Shelf Registration or any
Subsequent Shelf Registration (as defined below).
The Company shall use its best efforts to cause the Initial Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date and to keep the Initial Shelf Registration continuously
effective under the Securities Act until the date which is 36 months from the
Effectiveness Date) (the "Effectiveness Period"), or such shorter period ending
when (i) all Registerable Securities covered by the Initial Shelf Registration
have been sold in the manner set forth and as contemplated in the Initial Shelf
Registration or (ii) a Subsequent Shelf Registration covering all of the
Registerable Securities has been declared effective under the Securities Act;
provided, however, that the Effectiveness Period shall be extended to the extent
-------- -------
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.
(ii) Subsequent Shelf Registrations. If the Initial Shelf Registration
------------------------------
or any Subsequent Shelf Registration ceases to be effective for any reason at
any time during the Effectiveness Period (other than because of the sale of all
of the securities registered thereunder), the Company shall use its best efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within 45 days of such cessation of
effectiveness to amend the Initial Shelf Registration in a manner to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registerable Securities (a "Subsequent Shelf Registration"). If a
Subsequent Shelf Registration is filed, the Company shall use its best efforts
to cause the Subsequent Shelf Registration to be declared effective under the
Securities Act as soon as practicable after such filing and to keep such
Registration Statement continuously effective for a period equal to the number
of days in the Effectiveness Period less the aggregate number of days during
which the Initial Shelf Registration or any Subsequent Shelf Registration was
previously continuously effective. As used herein the term "Shelf Registration"
means the Initial Shelf Registration and any Subsequent Shelf Registration.
9
(iii) Supplements and Amendments. The Company shall promptly
--------------------------
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority of the Registerable Securities covered by
such Registration Statement or by any underwriter of such Registerable
Securities.
(iv) Hold-Back Agreements
--------------------
(A) Restrictions on Public Sale by Holders of Registerable
------------------------------------------------------
Securities. Each Holder of Registerable Securities whose Registerable
----------
Securities are covered by a Shelf Registration filed pursuant to Section
2(g)(i) hereof (which Registerable Securities are not being sold in the
underwritten offering described below) agrees, if requested (pursuant to a
timely written notice) by the managing underwriter or underwriters in an
underwritten offering, not to effect any public sale or distribution of any
securities within the class of securities covered by such Shelf
Registration or any similar class of securities of the Company, including a
sale pursuant to Rule 144 or Rule 144A (except as part of such underwritten
offering), during the period beginning 30 days prior to, and ending 120
days after, the closing date of each underwritten offering made pursuant to
such Shelf Registration, to the extent timely notified in writing by the
Company or by the managing underwriter or underwriters; provided, however,
-------- -------
that each holder of Registerable Securities shall be subject to the hold-
back restrictions of this Section 2(g)(iv)(A) only once during the term of
this Agreement.
The foregoing provisions shall not apply to any Holder of
Registerable Securities if such Holder is prevented by applicable statute
or regulation from entering into any such agreement; provided, however,
-------- -------
that any such Holder shall undertake, in its request to participate in any
such underwritten offering, not to effect any public sale or distribution
of the class of securities covered by such Shelf Registration (except as
part of such underwritten offering) during such period unless it has
provided 45 days' prior written notice of such sale or distribution to the
Company or the managing underwriter or underwriters, as the case may be.
(B) Restrictions on the Company and Others. The Company agrees
--------------------------------------
(1) not to effect any public or private sale or distribution (including,
without limitation, a sale pursuant to Regulation D under the Securities
Act) of any securities the same as or similar to those covered by a Shelf
Registration filed pursuant hereto, or any securities convertible into or
exchangeable or exercisable for such securities, during the 30 days prior
to, and during the 120-day period beginning on, the commencement of an
underwritten public distribution of Registerable Securities, where the
managing underwriter or underwriters so requests; (2) to include in any
agreements entered into by the Company on or after the date of this
Agreement (other than any underwriting agreement relating to a public
offering registered under the Securities Act) pursuant to which the Company
issues or agrees to issue securities the same as or similar to the
Registerable Securities a provision that each holder of such securities
that are the same as or
10
similar to Registerable Securities issued at any time on or after the date
of this Agreement agrees not to effect any public or private sale or
distribution, or request or demand the registration, of any such securities
(or any securities convertible into or exchangeable or exercisable for such
securities) during the period referred to in clause (1) of this Section
2(g)(iv)(B), including any sale pursuant to Rule 144 or Rule 144A; and (3)
not to grant or agree to grant any "piggy back registration" or other
similar rights to any holder of the Company's or any of its subsidiaries'
securities issued on or after the date of this Agreement with respect to
any Registration Statement.
2.2 (a) Piggy-Back Registration. If at any time the Company proposes to
-----------------------
file a Registration Statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of any of its
securityholders of any class of its common equity securities (other than (i) a
Registration Statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC) or (ii) a Registration Statement filed in connection with an
exchange offer or offering of securities solely to the Company's existing
securityholders), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event fewer than 15 days before the anticipated filing date or 10 days if the
Company is subject to filing reports under the Exchange Act and able to use Form
S-3 under the Securities Act), and such notice shall offer such Holders the
opportunity to register such number of shares of Registrable Securities as each
such Holder may request in writing not later 15 days prior to the anticipated
effective date of the Registration Statement (or eight days of the notice of the
proposed filing if the Company is subject to filing reports under the Exchange
Act and able to use Form S-3 under the Securities Act) after receipt of such
written notice from the Company (which request shall specify the Registrable
Securities intended to be disposed of by such Selling Holder and the intended
method of distribution thereof) (a "Piggy-Back Registration"). The Company
shall use its best efforts to keep such Piggy-Back Registration continuously
effective under the Securities Act until at least the earlier of (A) 180 days
after the effective date thereof or (B) the consummation of the distribution by
the Holders of all of the Registrable Securities covered thereby. The Company
shall use its best efforts to cause the managing underwriter or underwriters, if
any, of such proposed offering to permit the Registrable Securities requested to
be included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company or any other securityholder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof. Any
Selling Holder shall have the right to withdraw its request for inclusion of its
Registrable Securities in any Registration Statement pursuant to this Section
2.2 by giving written notice to the Company of its request to withdraw. The
Company may withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective or the Company may elect to delay the registration; provided,
--------
however, that the Company shall give prompt written notice thereof to
-------
participating Selling Holders. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities requested
pursuant to this Section 2.2, and each Holder of Registrable Securities shall
pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to a Registration Statement effected pursuant to this Section 2.2.
11
No registration effected under this Section 2.2, and no failure to effect a
registration under this Section 2.2, shall relieve the Company of its obligation
to effect a registration upon the request of Holders of Registrable Securities
pursuant to Section 2.1 hereof, and no failure to effect a registration under
this Section 2.2 and to complete the sale of securities registered thereunder in
connection therewith shall relieve the Company of any other obligation under
this Agreement.
(b) Priority in Piggy-Back Registration. In a registration pursuant to
-----------------------------------
Section 2.2 hereof involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed, in
writing, the Company and the Selling Holders requesting inclusion in such
offering that in such underwriter's or underwriters' opinion the total number of
securities which the Company, the Selling Holders and any other Persons desiring
to participate in such registration intend to include in such offering is such
as to adversely affect the success of such offering, including the price at
which such securities can be sold, then the Company will be required to include
in such registration only the amount of securities which it is so advised should
be included in such registration. In such event: (x) in cases only involving
the registration for sale of securities for the Company's own account (other
than pursuant to the exercise of piggyback rights herein and in other
contractual commitments of the Company), securities shall be registered in such
offering in the following order of priority: (i) first, the securities which
-----
the Company proposes to register, (ii) second, provided that no securities
------
sought to be included by the Company have been excluded from such registration,
the securities which have been requested to be included in such registration by
the Holders of Registrable Securities pursuant to this Agreement and by the
other parties to the Stockholder Rights Agreement in such proportion between the
Holders and such parties to the Stockholder Rights Agreement such that one-third
of the securities to be included shall be for the account of the Holders and
two-thirds shall be for the account of the other parties to the Stockholder
Rights Agreement (such one-third for the account of the Holders to be allocated
among the Holders pro rata based on the amount of securities sought to be
registered by the Holders) and (iii) third, provided that no securities sought
-----
to be included by the Company or the Holders or the other parties to the
Stockholder Rights Agreement have been excluded from such registration, the
securities of other Persons entitled to exercise "piggy-back" registration
rights pursuant to contractual commitments of the Company (pro rata based on the
amount of securities sought to be registered by such Persons); (y) in cases not
involving the registration for sale of securities for the Company's own account
only or not for the account of any party to the Stockholder Rights Agreement,
securities shall be registered in such offering in the following order of
priority: (i) first, the securities of any Person whose exercise of a "demand"
-----
registration right pursuant to a contractual commitment of the Company is the
basis for the registration (provided that if such Person is a Holder of
Registrable Securities, as among Holders of Registrable Securities there shall
be no priority and Registrable Securities sought to be included by Holders of
Registrable Securities shall be included pro rata based on the amount of
securities sought to be registered by such Persons), (ii) second, provided that
------
no securities of such Person referred to in the immediately preceding clause (i)
have been excluded from such registration, the securities which have been
requested to be included in such registration by the Holders of Registrable
Securities pursuant to this Agreement and by the other parties to the
Stockholder Rights Agreement in
12
such proportion between the Holders and such parties to the Stockholder Rights
Agreement such that one-third of the securities to be included shall be for the
account of the Holders and two-thirds shall be for the account of the parties to
the Stockholder Rights Agreement (such one-third for the account of the Holders
to be allocated among the Holders pro rata based on the amount of securities
sought to be registered by the Holders) and (iii) third, provided that no
-----
securities of such Person referred to in the immediately preceding clause (i) or
of the Holders or of the other parties to the Stockholder Rights Agreement have
been excluded from such registration, securities of other Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments
(pro rata based on the amount of securities sought to be registered by such
Persons) and (iv) fourth, provided that no securities of any other Person have
------
been excluded from such registration, the securities which the Company proposes
to register; and (z) in cases involving the registration for sale of securities
for the account of any other party to the Stockholder Rights Agreement,
securities shall be registered in such offering in the following order of
priority: (i) first, the securities which have been requested to be included in
-----
such registration by the Holders of Registrable Securities pursuant to this
Agreement and by the other parties to the Stockholder Rights Agreement in such
proportion between the Holders and such parties to the Stockholder Rights
Agreement such that one-third of the securities to be included shall be for the
account of the Holders and two-thirds shall be for the account of the other
parties to the Stockholder Rights Agreement (such one-third for the account of
the Holders to be allocated among the Holders pro rata based on the amount of
securities sought to be registered by the Holders), and (ii) second, provided
------
that no securities of the Holders or of the other parties to the Stockholder
Rights Agreement have been excluded from such registration, securities of other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments (pro rata based on the amount of securities sought to be
registered by such Persons) and (iii) third, provided that no securities of any
-----
other Person has been excluded from such registration, the securities which the
Company proposes to register.
If, as a result of the provisions of this Section 2.2(b), any Selling
Holder shall not be entitled to include all Registrable Securities in a Piggy-
Back Registration that such Selling Holder has requested to be included, such
Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration.
2.3 Limitations, Conditions and Qualifications to Obligations Under
---------------------------------------------------------------
Registration Covenants. The obligations of the Company set forth in Sections 2.1
----------------------
and 2.2 hereof are subject to each of the following limitations, conditions and
qualifications:
(i) Subject to the next sentence of this paragraph, the Company
shall be entitled to postpone, for a reasonable period of time, the filing
or effectiveness of, or suspend the rights of any Holders to make sales
pursuant to, any Registration Statement otherwise required to be prepared,
filed and made and kept effective by it hereunder; provided, however, that
-------- -------
the duration of such postponement or suspension may not exceed the earlier
to occur of (A) 15 days after the cessation of the circumstances described
in the next sentence of this paragraph on which such postponement or
suspension is based or (B) 90 days after the date of the determination of
the Board of Directors referred to in the next sentence, and the duration
of such postponement or
13
suspension shall be excluded from the calculation of the 90-day period
described in Section 2.1(b) hereof. Such postponement or suspension may be
effected only if the Board of Directors of the Company determines
reasonably and in good faith that the filing or effectiveness of, or sales
pursuant to, such Registration Statement would materially impede, delay or
interfere with any financing, offer or sale of securities, acquisition,
corporate reorganization or other significant transaction involving the
Company or any of its affiliates or require disclosure of material
information which the Company has a bona fide business purpose for
preserving as confidential, which financing, offer or sale of securities,
acquisition, corporate reorganization or other significant transaction had
been initiated at the time of the filing of such Registration Statement;
provided, however, that the Company shall not be entitled to such
-------- -------
postponement or suspension more than twice in any twelve-month period. If
the Company shall so postpone the filing of a Registration Statement it
shall, as promptly as possible, deliver a certificate signed by the Chief
Executive Officer of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (y) have the right, in the
case of a postponement of the filing or effectiveness of a Registration
Statement, upon the affirmative vote of the Holders of not less than a
majority of the Registrable Securities to be included in such Registration
Statement, to withdraw the request for registration by giving written
notice to the Company within 10 days after receipt of such notice or (z) in
the case of a suspension of the right to make sales, receive an extension
of the registration period equal to the number of days of the suspension.
Any Demand Registration as to which the withdrawal election referred to in
the preceding sentence has been effected shall not be counted for purposes
of the three Demand Registrations the Company is required to effect
pursuant to Section 2.1 hereof.
(ii) The Company shall not be required by this Agreement to effect
a Demand Registration within 90 days immediately following the effective
date of any registration statement pertaining to a firmly underwritten
offering of equity securities of the Company for its own account; provided,
--------
however, that this clause (ii) shall not apply if the underwriter of such
-------
offering consents to the request for such Demand Registration pursuant to
Section 2.1(a).
(iii) The Company shall not be required by this Agreement to effect
a Demand Registration within 60 days immediately following the effective
date of any registration statement pertaining to a firmly underwritten
offering of equity securities of the Company for the account of any
securityholder of the Company; provided, however, that this clause (ii)
-------- -------
shall not apply if the underwriter of such offering consents to the request
for such Demand Registration pursuant to Section 2.1(a).
(iv) The Company's obligations shall be subject to the obligations
of the Selling Holders, which the Selling Holders acknowledge, to furnish
all information and materials and to take any and all actions as may be
required under applicable federal and state securities laws and regulations
to permit the Company to comply with all applicable requirements of the SEC
and to obtain any acceleration of the effective date of such Registration
Statement.
14
(v) The Company shall not be obligated to cause any special audit
to be undertaken in connection with any registration pursuant to this
Agreement unless such audit is required by the SEC or requested by the
underwriters with respect to such registration.
2.4 Restrictions on Sale by the Company and Others. The Company
----------------------------------------------
covenants and agrees that (i) it shall not, and that it shall not cause or
permit any of its subsidiaries to, effect any public sale or distribution of any
securities of the same class as any of the Registrable Securities or any
securities convertible into or exchangeable or exercisable for such securities
(or any option or other right for such securities) during the 30-day period
prior to, and during the 120-day period beginning on, the commencement of any
underwritten offering of Registrable Securities pursuant to a Demand
Registration which has been requested pursuant to this Agreement, or a Piggy-
Back Registration which has been scheduled, prior to the Company or any of its
subsidiaries publicly announcing its intention to effect any such public sale or
distribution; (ii) the Company will not, and the Company will not cause or
permit any subsidiary of the Company to, after the date hereof, enter into any
agreement or contract that conflicts with or limits or prohibits the full and
timely exercise by the Holders of Registrable Securities of the rights herein to
request a Demand Registration or to join in any Piggy-Back Registration subject
to the other terms and provisions hereof; and (iii) that it shall use its
reasonable best efforts to secure the written agreement of each of its officers
and directors to not effect any public sale or distribution of any securities of
the same class as the Registrable Securities (or any securities convertible into
or exchangeable or exercisable for any such securities), or any option or right
for such securities during the period described in clause (i) of this Section
2.4.
2.5 Rule 144 and Rule 144A. The Company covenants that it will file
----------------------
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder or beneficial owner of Registrable
Securities, make available such information necessary to permit sales pursuant
to Rule 144A under the Securities Act. The Company further covenants that it
will take such further action as any Holder of Registrable Securities may
reasonably request, 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 (a) Rule 144(k) and Rule
144A under the Securities Act, as such Rules may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the SEC (it being
expressly understood that the foregoing shall not create any obligation on the
part of the Company to file periodic reports or other reports under the Exchange
Act at any time that it is not then required to file such reports pursuant to
the Exchange Act). Upon the request of any Holder of Registrable Securities,
the Company will in a timely manner deliver to such Holder a written statement
as to whether it has complied with such information requirements.
2.6 Registration on Form S-3. (a) In addition to the rights set
------------------------
forth in Section 2.1 and 2.2 hereof, if a Holder requests that the Company file
a registration statement on Form S-3 (or any successor to Form S-3) for a public
offering of shares of Registrable Securities the reasonably anticipated
aggregate price to the public of which would be at least $1,000,000, and the
Company is a
15
registrant entitled to use Form S-3 to register the Shares for such an offering,
the Company shall use its best efforts to cause such shares to be registered for
the offering as soon as practicable on Form S-3 (or any successor form to Form
S-3).
(b) The Holders' right to register shares under Section 2.6 shall be
shared pro rata among all Holders of Registrable Securities and all other
holders of securities of the Company who have a right to request inclusion
therein based on the number of shares of Registrable Securities held by each
Holder.
(c) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2.6 in the following situations:
(i) if the Company, within ten (10) days of the receipt of the request of the
Holders, gives notice of its bona fide intention to effect the filing of a
registration statement with the SEC within forty-five (45) days of receipt of
such request (other than with respect to a registration statement relating to a
Rule 145 transaction, an offering solely to employees or any other registration
which is not appropriate for the registration of Registrable Securities); (ii)
during the period starting with the date of filing of, and ending on a date
ninety (90) days following the effective date of, a registration statement
described in (i) above or pursuant to Section 2.1 or 2.2 hereof; provided,
--------
however, that the Company is actively employing in good faith all reasonable
-------
efforts to cause such registration statement to become effective; provided,
--------
however, that no other person or entity could require the Company to file a
-------
registration statement in such period; or (iii) more than once in any six month
period.
SECTION 3. "MARKET STAND-OFF" AGREEMENT.
(a) Each Holder hereby agrees that it shall not, to the extent
requested by the Company or an underwriter of securities of the Company, sell or
otherwise transfer or dispose of any Registrable Securities or other shares of
stock of the Company then owned by such Holder (other than to donees or partners
of the Holder who agree to be similarly bound) for up to 180 days following the
date of the final Prospectus in connection with the Registration Statement of
the Company filed under the Securities Act; provided, however, that such
agreement shall be applicable only to the first such registration statement of
the Company that covers securities to be sold on its behalf to the public in an
underwritten offering but not to Registrable Securities sold pursuant to such
registration statement and that such agreement shall only be applicable if the
underwriters request such agreement from each Holder.
(b) In order to enforce the foregoing covenant, the Company shall have
the right to place restrictive legends on the certificates representing the
shares subject to this Section and to impose stop transfer instructions with
respect to the Registrable Securities and such other shares of stock of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period. The provisions of this
Section 3 shall be binding upon any transferee of any Registrable Securities.
16
SECTION 4. REGISTRATION PROCEDURES. In connection with the obligations
of the Company with respect to any Registration Statement pursuant to Sections
2.1, 2.2 and 2.6 hereof, the Company shall, except as otherwise provided:
(a) Prepare and file with the SEC as soon as practicable each such
Registration Statement (but in any event on or prior to the date of filing
thereof required under this Agreement) and cause such Registration
Statement to become effective and remain effective as provided herein;
provided, however, that before filing any such Registration Statement or
-------- -------
any Prospectus (for registrations pursuant to Sections 2.1 and 2.2 hereof)
or any amendments or supplements thereto (only for registrations pursuant
to Section 2.1 hereof) (including documents that would be incorporated or
deemed to be incorporated therein by reference, including such documents
filed under the Exchange Act that would be incorporated therein by
reference), the Company shall afford promptly to the Holders of the
Registrable Securities covered by such Registration Statement, their
counsel and the managing underwriter or underwriters, if any, an
opportunity to review copies of all such documents proposed to be filed a
reasonable time prior to the proposed filing thereof. The Company shall
not file any Registration Statement or Prospectus (for registrations
pursuant to Sections 2.1 and 2.2 hereof) or any amendments or supplements
thereto (only for registrations pursuant to Section 2.1 hereof) if the
Holders of a majority of the Registrable Securities covered by such
Registration Statement, their counsel, or the managing underwriter or
underwriters, if any, shall reasonably object in writing unless failure to
file any such amendment or supplement would involve a violation of the
Securities Act or other applicable law.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods
prescribed hereby; cause the related Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities, their counsel and
the managing underwriter or underwriters, if any, promptly (but in any
event within two (2) Business Days), and confirm such notice 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
(including in such notice a written statement that any Holder may, upon
request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and
schedules and exhibits), (ii) of the issuance by the SEC of any stop
order suspending the
17
effectiveness of such Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus or the initiation or
threatening of any proceedings for that purpose, (iii) if at any time when
a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Securities the representations and
warranties of the Company contained in any agreement (including any
underwriting agreement) contemplated by Section 4(m) below, to the
knowledge of the Company, cease to be true and correct in any material
respect, (iv) of the receipt by the Company of any notification with
respect to (A) the suspension of the qualification or exemption from
qualification of the Registration Statement or any of the Registrable
Securities covered thereby for offer or sale in any jurisdiction, or (B)
the initiation of any proceeding for such purpose, (v) of the happening of
any event, the existence of any condition or information becoming known
that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of such Registration
Statement, it will conform in all material respects with the requirements
of the Securities Act and it 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, not misleading, and
that in the case of the Prospectus, it will conform in all material
respects with the requirements of the Securities Act and it 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, and (vi) of the Company's reasonable determination
that a post-effective amendment to such Registration Statement would be
appropriate.
(d) Use every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities covered thereby for sale in any jurisdiction, and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment.
(e) If requested by the managing underwriter or underwriters, if any,
or the Holders of a majority of the Registrable Securities being sold in
connection with an underwriting offering (only for registrations pursuant
to Section 2.1 hereof), (i) promptly incorporate in a prospectus supplement
or post-effective amendment such information as the managing underwriter or
underwriters, if any, or such Holders reasonably request to be included
therein to comply with applicable law, (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to
be incorporated in such prospectus supplement or post- effective amendment,
and (iii) supplement or make amendments to such Registration Statement.
(f) Furnish to each Holder of Registrable Securities who so requests
and to counsel for the Holders of Registrable Securities and each managing
underwriter, if any, without charge, upon request, one conformed copy of
the Registration Statement and each post-effective amendment thereto,
including financial statements and schedules, and of all documents
18
incorporated or deemed to be incorporated therein by reference and all
exhibits (including exhibits incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their counsel
and each underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and, subject to
the last paragraph of this Section 4, the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of
the Holders of Registrable Securities and the underwriter or underwriters
or agents, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior to any offering of Registrable Securities, to register or
qualify, and cooperate with the Holders of Registrable Securities, the
underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of, such Registrable Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions within
the United States as the managing underwriter or underwriters reasonably
request in writing, or, in the event of a non-underwritten offering, as the
Holders of a majority of the Registrable Securities may request; provided,
--------
however, that where Registrable Securities are offered other than through
-------
an underwritten offering, the Company agrees to cause its counsel to
perform Blue Sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 4(h); keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the securities
covered thereby; provided, however, that the Company will not be required
-------- -------
to (A) qualify generally to do business in any jurisdiction where it is not
then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject
or (C) become subject to taxation in any jurisdiction where it is not then
so subject.
(i) Cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restrictive
legends whatsoever and shall be in a form eligible for deposit with The
Depository Trust Company ("DTC"); and enable such Registrable Securities to
be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or Holders may reasonably request at
least two business days prior to any sale of Registrable Securities in a
firm commitment underwritten public offering.
(j) [Intentionally Omitted]
19
(k) Upon the occurrence of any event contemplated by Section 4(c)(v)
or 4(c)(vi) above, as promptly as practicable prepare a supplement or post-
effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and, subject to Section 4(a) hereof,
file such with the SEC so that, as thereafter delivered to the purchasers
of Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(l) Prior to the effective date of a Registration Statement, (i)
provide the registrar for the Registrable Securities with certificates for
such securities in a form eligible for deposit with DTC and (ii) provide a
CUSIP number for such securities.
(m) Enter into an underwriting agreement in form, scope and substance
as is customary in underwritten offerings and take all such other actions
as are reasonably requested by the managing underwriter or underwriters in
order to expedite or facilitate the registration or disposition of such
Registrable Securities in any underwritten offering to be made of the
Registrable Securities in accordance with this Agreement, and in such
connection, (i) make such representations and warranties to the underwriter
or underwriters, with respect to the business of the Company and the
subsidiaries of the Company, and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made
by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) use reasonable efforts to obtain opinions of
counsel to the Company and updates thereof, addressed to the underwriter or
underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably
requested by underwriters; (iii) use reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if applicable, the subsidiaries of the
Company) and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement, addressed to each
of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as reasonably
requested by the managing underwriter or underwriters and as permitted by
the Statement of Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain customary indemnification
provisions and procedures (or such other provisions and procedures
acceptable to Holders of a majority of Registrable Securities covered by
such Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
20
(n) Make available for inspection by a representative of the Holders
of Registrable Securities being sold, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney or
accountant retained by such representative of the Holders or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and the
subsidiaries of the Company, and cause the officers, directors and
employees of the Company and the subsidiaries of the Company to supply all
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement; provided, however, that all
-------- -------
material non-public information shall be kept confidential by such
Inspector, except to the extent that (i) the disclosure of such information
is necessary or advisable to avoid or correct a misstatement or omission in
the Registration Statement or in any Prospectus; provided, however, that
-------- -------
prior notice is given to the Company, and the Company's legal counsel and
such Holder's legal counsel concur that disclosure is required, (ii) the
release of such information is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (iii) disclosure of such
information is necessary or advisable in connection with any action, claim,
suit or proceeding, directly or indirectly, involving or potentially
involving such Inspector and arising out of, based upon, relating to or
involving this Agreement or any of the transactions contemplated hereby or
arising hereunder; provided, however, that prior notice shall be provided
-------- -------
as soon as practicable to the Company of the potential disclosure of any
information by such Inspector pursuant to clauses (ii) or (iii) of this
sentence to permit the Company to obtain a protective order (or waive the
provisions of this paragraph (n)) and that such Inspector shall take all
actions as are reasonably necessary to protect the confidentiality of such
information (if practicable) to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and
interests of the Holder or any Inspector, or (iv) such information has been
made generally available to the public.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than forty-five (45) days after the end of any 12 month period (or
ninety (90) days after the end of any 12 month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to an underwriter or to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold
to an underwriter or to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the effective
date of the relevant Registration Statement, which statements shall cover
said 12 month periods.
(p) Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed.
21
(q) Cooperate with the Selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends
and registered in such names as the selling Holders may reasonably request
at least two business days prior to the closing of any sale of Registrable
Securities.
Each seller of Registrable Securities as to which any registration is
being effected agrees, as a condition to the registration obligations with
respect to such Holder provided herein, to furnish to the Company such
information regarding such seller and the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request in writing
to comply with the Securities Act and other applicable law. The Company may
exclude from such registration the Registrable Securities of any seller for so
long as such seller fails to furnish such information within a reasonable time
after receiving such request. If the identity of a seller of Registrable
Securities is to be disclosed in the Registration Statement, such seller shall
be permitted to include all information regarding such seller as it shall
reasonably request.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iv),
4(c)(v), or 4(c)(vi) hereof, such Holder will forthwith discontinue disposition
of such Registrable Securities covered by the Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(k) hereof), or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed, and has received copies of any amendments or
supplements thereto, and, if so directed by the Company, such Holder will, at
the Company's expense, deliver to the Company all copies, other than permanent
file copies, then in such Holder's actual possession of the Prospectus covering
such Registrable Securities current at the time of receipt of such notice;
provided, however, that nothing herein shall create any obligation on the part
-------- -------
of any Holder to undertake to retrieve or return any such Prospectus not within
the actual possession of such Holder. In the event the Company shall give any
such notice, the period of time for which a Registration Statement is required
hereunder to be effective shall be extended by the number of days during such
periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Section 4(k) hereof or (y) the Advice.
SECTION 5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Holder and each Person, if any, who controls
such Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, or is under common control with, or is
controlled by, such Holder, from and against all losses, claims, damages and
liabilities (including, without limitation, and subject to clause (c) of this
Section 5 below, the reasonable legal fees and other reasonable out-of-pocket
expenses actually incurred by any Holder or any such controlling or affiliated
Person in connection with any suit, action or proceeding or any claim asserted),
caused by, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained
22
in any Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act or in any
registration statement filed by the Company covering the issuance of Warrant
Shares and resales thereof (a "Warrant Share Registration Statement"), or caused
by any omission or alleged omission to state in any such Registration Statement
or Warrant Share Registration Statement a material fact required to be stated
therein or necessary to make the statements therein not misleading, or caused by
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, Prospectus or Warrant Share Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state in
any such preliminary prospectus, Prospectus or Warrant Share Prospectus a
material fact required to be stated in any such preliminary prospectus,
Prospectus or Warrant Share Prospectus or necessary to make the statements in
any such preliminary prospectus, Prospectus or Warrant Share Prospectus in light
of the circumstances under which they were made not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Holder furnished to the
Company in writing by such Holder expressly for use in any such Registration
Statement, Warrant Share Registration Statement or Prospectus; provided,
--------
however, that the Company shall not be required to indemnify any such Person if
-------
such untrue statement or omission or alleged untrue statement or omission was
contained or made in any preliminary prospectus and corrected in the Prospectus
or such Warrant Share Prospectus, as the case may be, or any amendment or
supplement thereto and the Prospectus or such Warrant Share Prospectus, as the
case may be, does not contain any other untrue statement or omission or alleged
untrue statement or omission of a material fact that was the subject matter of
the related proceeding and any such loss, liability, claim, damage or expense
suffered or incurred by such indemnified Person resulted from any action, claim
or suit by any Person who purchased Registrable Securities which are the subject
thereof from such indemnified Person and it is established in the related
proceeding that such indemnified Person failed to deliver or provide a copy of
the Prospectus or Warrant Share Prospectus, as the case may be (as amended or
supplemented) to such Person with or prior to the confirmation of the sale of
such Registrable Securities sold to such Person if required by applicable law,
unless such failure to deliver or provide a copy of the Prospectus or Warrant
Share Prospectus, as the case may be (as amended or supplemented) was a result
of noncompliance by the Company with Section 4 hereof or as a result of the
failure of the Company to provide such Prospectus or Warrant Share Prospectus,
as the case may be.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign any Registration
Statement or Warrant Share Registration Statement, as the case may be, and each
Person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Holder, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement or Warrant Share
Registration Statement, as the case may be (or any amendment thereto) or any
Prospectus or Warrant Share Prospectus, as the case may be (or any amendment or
supplement thereto). The liability of any Holder under this paragraph shall in
no event exceed the proceeds received by such Holder from sales of Registrable
Securities giving rise to such obligations.
23
(c) In case any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either paragraph
(a) or (b) above, such Person (the "indemnified party") shall promptly notify
the Person against which such indemnity may be sought (the "indemnifying party")
in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
reasonably designate in such proceeding and shall pay the reasonable fees and
expenses actually incurred of such counsel relating to such proceeding;
provided, however, that the failure to so notify the indemnifying party shall
-------- -------
not relieve it of any obligation or liability which it may have hereunder or
otherwise. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary, (ii) the
indemnifying party shall have failed to retain within a reasonable period of
time counsel reasonably satisfactory to such indemnified party or parties or
(iii) the named parties to any such proceeding (including any impleaded parties)
include both such indemnified party or parties and the indemnifying parties or
an affiliate of the indemnifying parties or such indemnified parties and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between the indemnifying party or
parties and the indemnified party or parties. It is understood that the
indemnifying parties shall not, in connection with any one such proceeding or
separate but substantially similar or related proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified party
or parties and that all such fees and expenses shall be reimbursed within
reasonable time of the request after the incurrence thereof. Any such separate
firm for the Holders and such control Persons of the Holders shall be designated
in writing by Holders who sold a majority in interest of Registrable Securities
sold by all such Holders and reasonably acceptable to the Company and any such
separate firm for the Company, its directors, its officers and such control
Persons of the Company shall be designated in writing by the Company and
reasonably acceptable to the Holders. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its prior written
consent (which consent shall not be unreasonably withheld or delayed) but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify and hold harmless the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement or compliance of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party, or indemnity could
have been sought hereunder by such indemnified party, unless such settlement or
compliance includes an unconditional written release of such indemnified party
in form and substance reasonably satisfactory to such indemnified party of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
24
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 5 is unavailable to, or insufficient to hold harmless, an
indemnified party in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect (i) the relative benefits received by
the Company on the one hand and the Holders on the other hand from the offering
of such Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, not only such relative benefits but
also the relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Holders on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (net of discounts and commissions but before
deducting expenses) of the Warrants sold pursuant to the Purchase Agreement
received by the Company bears to the total proceeds received by such Holder from
the sale of Registrable Securities, as the case may be. The relative fault of
the Company on the one hand and the Holders on the other hand shall 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, and any other
equitable considerations appropriate in the circumstances.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
--- ----
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 5(d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in Section 5(d) above shall be deemed to include,
subject to the limitations set forth above, any reasonable legal or other
expenses actually incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, in no event shall a Holder be required to
contribute any amount in excess of the amount by which proceeds received by such
Holder from sales of Registrable Securities exceeds the amount of any damages
that such Holder has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 5 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
25
indemnity and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Purchaser or any person who controls a
Purchaser, the Company, their respective directors or officers or any person
controlling the Company and (ii) any termination of this Agreement.
SECTION 6. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company represents and warrants
--------------------------
to the Holders that it has not entered into nor will the Company on or after the
date of this Agreement enter into, or cause or permit any of its subsidiaries to
enter into, any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities, if any, under
any such agreements.
(b) Amendments and Waivers. 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 Holders of not less than a majority of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided, however, that Section 5 hereof and this Section
-------- -------
6(b) may not be amended, modified or supplemented without the prior written
consent of each Holder (including any Person who was a Holder of Registrable
Securities disposed of pursuant to any Registration Statement or a Warrant Share
Registration Statement) affected by such amendment, modification or supplement.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable Securities may be
given by the Holders of not less than a majority of the Registrable Securities
proposed to be sold by such Holders pursuant to such Registration Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address of Holder as set forth in the
register for the Warrants or the Warrant Shares, which address initially is,
with respect to the Purchaser, the address set forth in the Purchase Agreement;
and (ii) if to the Company, initially at the address set forth below the
Company's name on the signature pages hereto and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(c), with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and
thereafter at such other address notice of which is given in accordance with the
provisions of this Section 6(c).
26
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if Personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
(d) 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, including, without limitation and without the need for an
express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Warrants and/or Registrable Securities, in any manner, whether by
operation of law or otherwise, such Warrants and/or Registrable Securities shall
be held subject to all of the terms of this Agreement, and by taking and holding
such Warrants and/or Registrable Securities such Person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such Person shall be entitled to receive the
benefits hereof.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
---------------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(h) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement and the Warrant Agreement, is intended by the parties as a final
expression of their agreement, and is 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 and therein. This Agreement, the Purchase
Agreement and the Warrant Agreement supersede all prior agreements and
understandings between the parties with respect to such subject matter.
27
(j) Attorneys' Fees. As between the parties to this Agreement, in
---------------
any action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to
its costs and expenses and any other available remedy.
(k) Securities Held by the Company or Its Affiliates. Whenever the
------------------------------------------------
consent or approval of Holders of a specified percentage of Registrable
Securities or Warrants is required hereunder, Registrable Securities or Warrants
held by the Company or by any of its affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted (in either the numerator or
the denominator) in determining whether such consent or approval was given by
the Holders of such required percentage.
(l) Remedies. In the event of a breach by the Company of any of its
--------
obligations under this Agreement, each Holder, in addition to being entitled to
exercise all rights provided herein, in the Purchase Agreement or granted by
law, including recovery of damages, will be entitled to specific performance of
its 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 any of the provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
28
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
DIVA SYSTEMS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
Address for Notice:
Building 203
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
TORONTO DOMINION SECURITIES (USA) INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
29
