WARRANT REGISTRATION RIGHTS AGREEMENT
Dated as of April 30, 1998
by and among
▇▇▇▇ TECHNOLOGY GROUP LTD.
and
ING BARING (U.S.) SECURITIES, INC.
THIS WARRANT REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made and entered into as of April 30, 1998, by and between ▇▇▇▇ TECHNOLOGY GROUP
LTD., a Delaware corporation (the "Company"), and ING BARING (U.S.) SECURITIES,
INC. (the "Initial Purchaser").
WHEREAS, this Agreement is made pursuant to the Purchase Agreement,
dated as of April 24, 1998, by and between the Company and the Initial Purchaser
(the "Purchase Agreement"), relating to, among other things, the sale by the
Company to the Initial Purchaser of an aggregate of 160,000 Units, consisting in
the aggregate of (i) $160,000,000 principal amount at maturity of 13% Senior
Notes due 2005 (the "Notes") and (ii) 160,000 Warrants (the "Unit Warrants"),
each representing the right to purchase initially 3.52 shares of Common Stock,
par value $.01 per share, of the Company (the "Common Stock").
WHEREAS, the Warrants have been issued pursuant to the Warrant
Agreement dated as of the date hereof by and between the Company and Marine
Midland Bank, as warrant agent (the "Warrant Agreement").
WHEREAS, in order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide to the Initial Purchaser
and the Holders (as defined herein), among other things, the registration rights
for the Warrant Shares (as defined herein) set forth in this Agreement, and the
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchaser under the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing
and the premises and mutual agreements herein set forth, the parties hereto
hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Advice" has the meaning ascribed to such term in the last paragraph
of Section 4 hereof.
"Black Out Period" has the meaning ascribed to such term in Section
2.3(b) hereof.
"Business Day" shall mean a day that is not a Legal Holiday.
"Common Stock" has the meaning ascribed to such term in the preamble
hereof.
"Company" shall have the meaning ascribed to that term in the
preamble hereof 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations
promulgated thereunder.
"Expiration Date" has the meaning ascribed to such term in the
Warrant Agreement.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Warrants or Warrant Shares, and each of its successors, assigns and direct
and indirect transferees who become registered owners of such Warrants or
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 Marine Midland Bank, as
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Trustee, pursuant to which the Notes are issued.
"Initial Purchaser" has the meaning ascribed to such term in the
preamble hereof.
"Inspectors" has the meaning ascribed to such term in Section 4(n)
hereof.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which
banking institutions in the City of New York are authorized or required by law,
regulation or executive order to remain closed.
"Notes" has the meaning ascribed to such term in the preamble
hereof.
"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 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.
"Purchase Agreement" 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 Warrant Shares
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 and securities, if any,
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 or such Warrant Shares and securities, if any,
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 or the satisfaction of any
condition. As to any particular Registrable Securities held by a Holder, such
securities shall cease to be Registrable Securities when (i) a
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Registration Statement with respect to the exercise or offering of such
securities by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been exercised and/or 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
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 shall not require registration or
qualification under the Securities Act or any similar state securities or blue
sky laws 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 state 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 (including the fees and expenses of one counsel for the
Holders to be selected by a majority of such 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;
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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 (net) 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.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, or any successor statute, and the rules and regulations
promulgated thereunder.
"Selling Holder" shall mean a Holder who is selling Registrable
Securities in accordance with the provisions of Section 2.1 or 2.2 hereof.
"Warrants" has the meaning ascribed to such term in the preamble
hereof.
"Warrant Agent" means Marine Midland Bank, and any successor Warrant
Agent for the Warrants pursuant to the Warrant Agreement.
"Warrant Agreement" has the meaning ascribed to such term in the
preamble hereof.
"Warrant Shares" means the shares of Common Stock delivered or
deliverable upon exercise of the Warrants.
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Section 2. Registration Rights.
Section 2.1. Demand Registration.
(a) General. At any time and from time to time after the first
anniversary of the date of the Warrant Agreement, Holders owning, individually
or in the aggregate, not less than the Requisite Securities may make a written
request, on (subject to Sections 2.1(b), 2.1(e) and 2.3(a)) no more than three
occasions (each, a "Demand Registration"), that the Company register the resale
of the Warrant Shares, under the Securities Act. 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 within
(i) 60 days of receipt of such written request for a Demand Registration if the
Company is then eligible to register an offering pursuant to Form S-3 under the
Securities Act; (ii) 90 days of receipt of such written request for a Demand
Registration if the Company is not then eligible to register an offering
pursuant to Form S-3 under the Securities Act but is then qualified as a
reporting company under the Exchange Act; or (iii) 180 days of receipt of such
written request for a Demand Registration in any other case. 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 Business Days after the receipt thereof. Within 10 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), 2.1(e) and 2.3(a) 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(e) 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 and any Person having "piggy-back"
registration rights pursuant to any contractual obligation of the Company shall
be included in a Demand Registration. 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.
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(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 all material
respects with all of its obligations under this Agreement 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 restraint
is not lifted within 60 days after being imposed, 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 six months 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 six month 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; provided, however, that
should the Holders of Registrable Securities remaining after such withdrawal
own, individually or in the aggregate, less than the Requisite Securities, the
Company shall have the right to terminate or withdraw any registration initiated
by it under Section 2.1 prior to the effectiveness of such registration.
(c) Restrictions on Sale by Holders. Each Holder of Registrable
Securities whose Registrable Securities are covered by a Registration Statement
filed pursuant to Section 2.1 and are to be sold by the Holder thereunder
agrees, if and to the extent reasonably requested by the managing underwriter or
underwriters in an underwritten offering of common stock or common equivalents
the gross proceeds of which equal at least $35.0 million, not to effect any
public sale or distribution of Registrable 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 10-day period prior
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to, and during the 180-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 an 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 Company and will be reasonably acceptable
to the Holders of not less than a majority of the Registrable Securities to be
sold thereunder. The Company shall obtain the consent of a majority of the
Holders of Registrable Securities in order for the third registration pursuant
to Section 2.1(a) to be an underwritten offering.
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 the underwriting
arrangements and (ii) comply with Rules 101, 102 and 104 of Regulation M
promulgated 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.
(e) 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 entitled to participate in such registration pursuant to
Section 2.1(a) hereof intend to include in such offering is such as to adversely
affect the success of such offering, including the
8
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 and 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 held by the Holders of Registrable Securities and such Persons), and
(ii) second, provided that no securities sought to be included by the Holders or
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 25% or more of the Registrable Securities which the Holders have
requested to be included in a registration statement pursuant to Section 2.1
hereof have been excluded from such 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.
Section 2.2. Piggy-Back Registration.
(a) General. If at any time after the first anniversary date of the
Warrant Agreement 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 security holders 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 other form of
limited purpose), (ii) a Registration Statement filed in connection with an
exchange offer or offering of securities solely to the Company's existing
security holders, or (iii) a Registration Statement filed pursuant to the
exercise of "demand" registration rights of existing security holders pursuant
to a contractual commitment of the Company) 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 than
5 days prior to the anticipated filing date of the Registration Statement after
receipt of
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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) 90 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 commercially reasonable 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 security holder included therein, subject
to the restrictions set forth in Section 2.2(b), 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 timely 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.
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 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
10
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 offering in the following order of priority: (i) first,
the securities which the Company proposes to register, and (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 and other Persons
entitled to exercise "piggy-back" registration rights pursuant to contractual
commitments of the Company (pro rata based on the amount of securities held by
the Holders of Registrable Securities requesting such inclusion and such
Persons).
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.
Section 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:
(a) 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 pursuant to Section 2.1 or 2.2 thereunder; 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 suspension shall be excluded from the calculation of the six
month period described in Section 2.1(b). 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
material financing, offer or sale of securities, acquisition, corporate
reorganization or other
11
significant transaction involving the Company or any of its Subsidiaries which
material financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction is under active consideration at
the time of such postponement or suspension; 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 or President 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.
(b) The Company shall not be required by this Agreement to file a
registration statement with respect to a Demand Registration during the period
starting with the date of filing of, and within 120 days immediately following,
the effective date of any registration statement under the Securities Act
pertaining to a firmly underwritten offering of equity securities of the Company
for its own account; provided that this clause (b) shall not apply from and
after December 15, 2003.
(c) The Company shall not be required by this Agreement to file a
registration statement with respect to a Demand Registration during the period
starting with the date of notice of a proper demand for the registration of
Common Stock of the Company, pursuant to a firmly underwritten offering, for the
account of any security holder of the Company in accordance with the terms of
the contractual arrangements governing such registration, and ending at the
earlier of:
(i) the withdrawal of any such registration statement or the request
to file such registration statement by the security holder requesting such
registration; or
(ii) 90 days after the effective date of any such registration
statement; provided, however, that the Company shall not be entitled to invoke
this clause (c) more than
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once during any 12-month period.
(d) 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 required of such Selling Holders and to take any and
all actions required of such Selling Holders 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; and
(e) 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.
Section 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), other than any Common Stock
and/or options, warrants or other Common Stock purchase rights, and the Common
Stock issued pursuant to such option, warrants or other rights, to employees,
officers or directors of, or consultants or advisors to the Company or any
subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Board of Directors of the Company, during
the 10-day period prior to, and during the 180-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, prior
to the Company or any of its subsidiaries publicly announcing its intention to
effect any such public sale or distribution; and (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.
Section 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
13
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.
Section 3. "Market Stand-Off" Agreement.
(a) Each Holder hereby agrees that it shall not, to the extent
requested by a managing underwriter of common stock or common equivalents of the
Company, sell or otherwise transfer or dispose of any Registrable Securities 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 each Registration Statement of the
Company filed under the Securities Act; provided, however, that such agreement
(i) shall not be applicable to Registrable Securities sold pursuant to such
registration, and (ii) shall only be applicable if the managing underwriters
request such agreement from each Holder.
(b) In order to enforce the foregoing covenant, the Company shall
have the right to impose stop transfer instructions with respect to the
Registrable Securities (and the Registrable 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.
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 2.5 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
14
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), the Company shall make available to the Holders
of the Registrable Securities covered by such Registration Statement, and the
managing underwriter or underwriters, if any, copies of all such documents
proposed to be filed, which documents will be subject to the review and comment
of such Holders and underwriters in connection with such sale, if any, for a
period of at least five Business Days, and the Company will not file any such
Registration Statement or any amendment or supplement to any such Registration
Statement (including all such documents incorporated by reference) to which the
Holders of the Registrable Securities covered by such Registration Statement or
the underwriters in connection with such sale, if any, shall reasonably object
within five Business Days after the receipt thereof. A participating Holder or
underwriter, if any, shall be deemed to have reasonably objected to such filing
if such Registration Statement, amendment or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission or fails to
comply with the applicable requirements of the Securities Act;
(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
15
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 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) 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, (iv) 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 (v) of the Company's reasonable
determination that a post-effective amendment to such Registration Statement
would be appropriate.
(d) Use commercially reasonable efforts 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
practicable 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 underwritten 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
16
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 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
17
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) 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 Section 2.1.
(k) Upon the occurrence of any event contemplated by Section
4(c)(iv) or 4(c)(v) 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) If the offering provided for herein is conducted by means of an
underwriting, 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
18
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 an opinion of counsel to the Company, 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 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 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.
(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, at the Inspector's expense, all financial and other records, pertinent
corporate documents and properties of the Company and the subsidiaries of the
Company as reasonably requested by the Inspector, 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 such
information shall be kept confidential by such Inspector and shall not be used
for any purpose other than as contemplated hereby, except to the extent that (i)
the disclosure of such information is necessary or advisable to avoid or correct
a misstatement or
19
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 security holders 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.
(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
20
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 seller 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)(iii),
4(c)(iv), or 4(c)(v) 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 unreasonable efforts to retrieve or return any such
Prospectus not within the actual possession or control of such Holder. In the
event the Company shall give any such notice, the period of time for which a
Registration Statement is required thereunder 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.
21
Section 5. Indemnification and Contribution.
22
(a) The Company agrees to indemnify and hold harmless each Holder,
its officers and directors, 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 in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities were registered
under the Securities Act, or caused by any omission or alleged omission to state
in any such 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 or 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 or
Prospectus a material fact required to be stated in any such preliminary
prospectus or Prospectus or necessary to make the statements in any such
preliminary prospectus or 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, Preliminary
Prospectus 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 any amendment or supplement
thereto and the Prospectus 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 (as amended or supplemented) to such Person
with or prior to the confirmation of the sale of such Registrable Securities
sold
23
to such Person if required by applicable law, unless such failure to deliver or
provide a copy of the Prospectus (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.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign any Registration
Statement, 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 any amendment thereto) or any Prospectus (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.
(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 thereunder or
otherwise unless the indemnifying party has been materially prejudiced by such
failure. 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
any 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
24
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 shall be 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. 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 thereunder by such indemnified party, unless such settlement or
compliance involves only the payment of money damages that are actually paid by
the indemnifying party or 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 or claims that
are the subject matter of such proceeding.
(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
25
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
26
be paid by the indemnifying party to the indemnified party as such losses,
claims, damages, liabilities or expenses are incurred. The 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 Holder or any person who controls a Holder, 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 thereunder 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 consents and the
Company has obtained the prior written consent of Holders of not less than a
majority in number of the then outstanding Warrants and Registrable Securities
not resold to the public for the purpose of adding any provision to or changing
in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the Holders of the outstanding Warrants;
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) 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 the Company and 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
27
communications provided for or permitted thereunder 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 Initial 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).
A copy of all notices and other communications under this Section
6(c) shall be delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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 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
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AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits itself and its property in any legal action or proceeding relating
to this Agreement or for recognition and enforcement of any judgment in respect
hereof, to the non-exclusive jurisdiction of the courts of the State of New York
and the courts of the United States of America for the Southern District of New
York, and appellate courts thereof, and consents and agrees to such action or
proceeding being brought in such courts; and (ii) waives any objection that it
may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in any inconvenient
court and agrees not to plead or claim the same.
(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.
(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
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a specified percentage of Registrable Securities or Warrants is required
thereunder, 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
▇▇▇▇ TECHNOLOGY GROUP LTD.
By: _____________________________
Name:
Title:
Address for Notices:
▇▇▇▇ Technology Group Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
ING BARING (U.S.) SECURITIES, INC.
By: _____________________________
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
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