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Exhibit 10.11
REGISTRATION RIGHTS AGREEMENT
dated as of April 16, 1998
among
NATIONAL RECORD MART, INC.
a Delaware corporation
and
THE HOLDERS OF REGISTRABLE SECURITIES
REFERRED TO HEREIN
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
April 16, 1998, by and among NATIONAL RECORD MART, INC., a Delaware corporation
(the "Company"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INC., a Delaware corporation ("▇▇▇▇▇▇▇"), and
SENECA CAPITAL L.P., a Delaware limited partnership ("Seneca" and collectively
with ▇▇▇▇▇▇▇, the "Holders").
RECITALS
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WHEREAS, pursuant to that certain Senior Secured Subordinated
Note Purchase Agreement of even date herewith, by and among the Company, ▇▇▇▇▇▇▇
and the Guarantors referred to therein (the "Secured Note Purchase Agreement"),
the Purchasers of Secured Notes (as defined in the Secured Note Purchase
Agreement) received warrants exercisable to acquire 200,000 shares of the
Company's common stock;
WHEREAS, pursuant to that certain Senior Subordinated Note
Purchase Agreement of even date herewith, by and among the Company, ▇▇▇▇▇▇▇,
Seneca and the Guarantors referred to therein (the "Unsecured Note Purchase
Agreement"), the Purchasers of Unsecured Notes (as defined in the Unsecured Note
Purchase Agreement) received warrants exercisable to acquire 200,000 shares of
the Company's common stock (the warrants issued to the Purchasers of the Secured
Notes and the Unsecured Notes being, collectively, the "Warrants");
WHEREAS, the Company and Holders of Warrants issued pursuant
to the Secured Note Purchase Agreement and the Unsecured Note Purchase Agreement
hereby desire to set forth the Holders' rights and the Company's obligations to
cause the registration pursuant to the Securities Act of 1933 of the shares of
common stock received or receivable upon the exercise of the Warrants;
NOW, THEREFORE, in consideration of the agreement by the
Holders to provide the benefits under the Secured Note Purchase Agreement and
the Unsecured Note Purchase Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. AGREEMENTS AND REPRESENTATIONS OF THE COMPANY.
1.1. The Company represents and warrants to the
Holders that it has the requisite power and authority to execute, deliver and
carry out this Agreement and has taken all necessary action to approve this
Agreement and to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly and properly executed and
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delivered by the Company and constitutes the legally valid and binding
obligation of the Company, enforceable against it in accordance with its terms.
Section 2. DEFINITIONS AND USAGE.
As used in this Agreement:
2.1. DEFINITIONS.
AGENT. "Agent" means the principal placement agent
on an agented placement of Registrable Securities.
COMMISSION. "Commission" shall mean the Securities
and Exchange Commission.
COMMON STOCK. "Common Stock" shall mean (i) the
common stock, $0.01 par value, of the Company, and (ii) shares of capital stock
of the Company issued by the Company in respect of or in exchange for shares of
such common stock in connection with any stock dividend or distribution, stock
split-up, recapitalization, recombination or exchange by the Company generally
of shares of such common stock.
CONTINUOUSLY EFFECTIVE. "Continuously Effective,"
with respect to a specified registration statement, shall mean that it shall not
cease to be effective and available for Transfers of Registrable Securities
thereunder for longer than either (i) any ten (10) consecutive business days, or
(ii) an aggregate of fifteen (15) business days during any calendar year during
the period specified in the relevant provision of this Agreement.
DEMAND REGISTRATION. "Demand Registration" shall
have the meaning set forth in SECTION 5.1.
DEMANDING HOLDERS. "Demanding Holders" shall have
the meaning set forth in Section 5.1.
EXCHANGE ACT. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder.
HOLDERS. "Holders" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
and Seneca Capital L.P., and Transferees of such Persons' Registrable Securities
with respect to the rights that such Transferees shall have acquired in
accordance with SECTION 9, at such times as such Persons shall have beneficial
or record ownership of Registrable Securities.
MAJORITY OF THE HOLDERS. A "Majority of the Holders"
means those Holders holding at any time a majority of the Registrable Securities
and Transferees of such
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Persons' Registrable Securities with respect to the rights that such Transferees
shall have acquired in accordance with SECTION 9, at such times as such Persons
shall have beneficial or record ownership of Registrable Securities.
PERSON. "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
PIGGYBACK REGISTRATION. "Piggyback Registration" shall have
the meaning set forth in Section 4.
PIGGYBACK SHELF REGISTRATION. "Piggyback Shelf Registration"
shall have the meaning set forth in Section 4.
REGISTER, REGISTERED AND REGISTRATION. "Register,"
"registered," and "registration" shall refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
REGISTRABLE SECURITIES. "Registrable Securities" shall mean,
subject to SECTION 9 and SECTION 12.2: (i) the Shares owned by a Holder on the
date of determination, (ii) any shares of Common Stock or other securities
issued or issuable upon the conversion or exercise of the Warrants or issued as
a dividend or other distribution with respect to, or in exchange by the Company
generally for, or in replacement by the Company generally of, such Shares; and
(iii) any securities issued in exchange for Shares in any merger or
reorganization of the Company; PROVIDED, HOWEVER, that Registrable Securities
shall not include any Shares which have theretofore been registered and sold
pursuant to the Securities Act or which have been sold to the public pursuant to
Rule 144 or any similar rule promulgated by the Commission pursuant to the
Securities Act, and, PROVIDED FURTHER, the Company shall have no obligation
under SECTIONS 3 and 4 to register any Registrable Securities of a Holder if the
Company shall deliver to the Holders requesting such registration an opinion of
counsel reasonably satisfactory to such Holders and its counsel to the effect
that the proposed sale or disposition of all of the Registrable Securities for
which registration was requested does not require registration under the
Securities Act for any sales or dispositions of such shares within the period
set forth in Rule 144(e), currently three (3) months. For purposes of this
Agreement, a Person will be deemed to be a holder of Registrable Securities
whenever such Person has the then-existing right to acquire such Registrable
Securities (by conversion, subscription or otherwise), whether or not such
acquisition has actually been effected.
REGISTRABLE SECURITIES THEN OUTSTANDING. "Registrable
Securities then outstanding" shall mean, with respect to a specified
determination date, the Registrable Securities owned by all Holders on such
date.
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REGISTRATION EXPENSES. "Registration Expenses" shall have the
meaning set forth in SECTION 7.1.
SECURED NOTE PURCHASE AGREEMENT. "Secured Note Purchase
Agreement" shall have the meaning set forth in the RECITALS.
SECURITIES ACT. "Securities Act" shall mean the Securities Act
of 1933, as amended and the rules and regulations promulgated thereunder.
SELLING HOLDERS. "Selling Holders" shall mean, with respect to
a specified registration pursuant to this Agreement, Holders whose Registrable
Securities are included in such registration.
SHARES. "Shares" shall mean the shares of Common Stock
acquired on exercise of a Warrant.
TRANSFER. "Transfer" shall mean and include the act of
selling, giving, transferring, creating a trust (voting or otherwise), assigning
or otherwise disposing of (other than pledging, hypothecating or otherwise
transferring as security) (and correlative words shall have correlative
meanings); PROVIDED HOWEVER, that any transfer or other disposition upon
foreclosure or other exercise of remedies of a secured creditor after an event
of default under or with respect to a pledge, hypothecation or other transfer as
security shall constitute a "Transfer".
UNDERWRITERS' REPRESENTATIVE. "Underwriters' Representative
shall mean the managing underwriter, or, in the case of a co-managed
underwriting, the managing underwriter designated as the Underwriters'
Representative by the co-managers.
UNSECURED NOTE PURCHASE AGREEMENT. "Unsecured Note Purchase
Agreement" shall have the meaning set forth in the RECITALS.
VIOLATION. "Violation" shall have the meaning set forth in
SECTION 8.1.
WARRANT. "Warrant" or "Warrants" shall have the meaning set
forth in the RECITALS.
2.2. USAGE.
(i) References to a Person are also references to its assigns
and successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
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(ii) References to Registrable Securities "owned" by a Holder
shall include Registrable Securities beneficially owned by such Person but which
are held of record in the name of a nominee, trustee, custodian, or other agent,
but shall exclude shares of Common Stock held by a Holder in a fiduciary
capacity for customers of such Person.
(iii) References to a document are to it as amended, waived
and otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
(iv) References to Sections or to Schedules or Exhibits are to
sections hereof or schedules or exhibits hereto, unless the context otherwise
requires.
(v) The definitions set forth herein are equally applicable
both to the singular and plural forms and the feminine, masculine and neuter
forms of the terms defined.
(vi) The term "including" and correlative terms shall be
deemed to be followed by "without limitation" whether or not followed by such
words or words of like import.
(vii) The term "hereof" and similar terms refer to this
Agreement as a whole.
(viii) The "date of" any notice or request given pursuant to
this Agreement shall be determined in accordance with SECTION 15.
Section 3. SHELF REGISTRATION
3.1. Pursuant to Rule 415 of the Securities Act,
the Company covenants that it shall have a registration statement pertaining to
the Registerable Securities on Form S-3 filed with and declared effective by
the Commission within six months of the date first written above and said
registration statement shall thereafter remain Continuously Effective for a
period not less than thirty-six (36) months from the date first written above.
Any Registration Expenses incurred by the Company pursuant to this Section
shall be borne solely by the Company.
3.2. If at any time prior to the thirty-six (36)
month period set forth in SECTION 3.1, the registration statement filed in
accordance with SECTION 3.1 ceases to be Continuously Effective the Holders
shall be entitled to Piggyback Registration rights set forth in SECTION 4 and
Demand Registration rights set forth in SECTION 5.
Section 4. PIGGYBACK REGISTRATIONS.
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4.1. Subject to SECTION 3.2, if at any time the Company
proposes to register (including for this purpose a registration effected by the
Company for holders of the Company's securities other than the Holders)
securities under the Securities Act in connection with the public offering
solely for cash on Form ▇-▇, ▇-▇ or S-3 (or any replacement or successor forms),
the Company shall promptly give each Holder of Registrable Securities written
notice of such registration (a "Piggyback Registration"). Upon the written
request of each Holder given within 20 days following the date of such notice,
the Company shall cause to be included in such registration statement and use
its best efforts to be registered under the Securities Act all the Registrable
Securities that each such Holder shall have requested to be registered. The
Company shall have the absolute right to withdraw or cease to prepare or file
any registration statement for any offering referred to in this SECTION 4
without any obligation or liability to any Holder.
4.2. If the Underwriters' Representative or Agent shall advise
the Company in writing (with a copy to each Selling Holder) that, in its
opinion, the amount of Registrable Securities requested to be included in such
Piggyback Registration would materially adversely affect such offering, or the
timing thereof, then the Company will include in such registration, to the
extent of the amount and class which the Company is so advised can be sold
without such material adverse effect in such offering: First, all securities
proposed to be sold by the Company for its own account and, if applicable, all
securities proposed to be sold by such holders other than the Holders for which
such registration is made, in accordance with the agreement between the Company
and such holders; second, the Registrable Securities requested to be included in
such registration by Holders pursuant to this SECTION 4, third, all other
securities being registered pursuant to the exercise of contractual rights
comparable to the rights granted in this SECTION 3, pro rata based on the
estimated gross proceeds from the sale thereof; and fourth, all other securities
requested to be included in such registration.
4.3. Each Holder shall be entitled to have its Registrable
Securities included in an unlimited number of Piggyback Registrations pursuant
to this SECTION 4.
4.4. If the Company has previously filed a registration
statement with respect to Registerable Securities pursuant to SECTION 5 or
pursuant to this SECTION 4 pursuant to which Registerable Securities were sold,
and if such previous registration has not been withdrawn or abandoned, the
Company will not file or cause to be effected any other registration of any of
its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the Securities Act (except on Form
▇-▇, ▇-▇ or any equivalent or successor forms thereto), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of 180 days has elapsed from the effective date of such a previous
registration, or, if such registration was for an underwritten offering, such
shorter period of days as the Underwriter's Representative or Agent shall have
given its consent.
Section 5. DEMAND REGISTRATION.
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5.1.
(i) Subject to SECTION 3.2, if the Holders of at least 30% of
the Registrable Securities make a written request to the Company (the "Demanding
Holders"), the Company shall cause there to be filed with the Commission a
registration statement meeting the requirements of the Securities Act (a "Demand
Registration"), and each Demanding Holder shall be entitled to have included
therein (subject to SECTION 5.6) all or such number of such Demanding Holder's
Registrable Securities, as the Demanding Holder shall request in writing;
provided, however, that no request may be made pursuant to this SECTION 5.1 if
within six (6) months prior to the date of such request a registration statement
pursuant to this SECTION 5.1 shall have been declared effective by the
Commission. Such Demand Registration shall be effected by the Company by means
of a shelf registration pursuant to Rule 415 of the Securities Act if so
requested by the Demanding Holders. Any request made pursuant to this SECTION
5.1 shall be addressed to the attention of the Secretary of the Company, and
shall specify the number of Registrable Securities to be registered, the
intended methods of disposition thereof and that the request is for a Demand
Registration pursuant to this SECTION 5.1(i). The Holders shall be entitled to
no more than two (2) Demand Registrations.
(ii) The Company shall be entitled to postpone for up to
ninety (90) days the filing of any registration statement otherwise required to
be prepared and filed pursuant to this SECTION 5.1, if the Board determines, in
its good faith reasonable judgment (with the concurrence of the managing
underwriter, if any), that such registration and the Transfer of Registrable
Securities contemplated thereby would materially interfere with, or require
premature disclosure of, any financing, acquisition or reorganization involving
the Company or any of its wholly owned subsidiaries and the Company promptly
gives the Demanding Holders notice of such determination; PROVIDED, HOWEVER,
that the Company shall not have postponed pursuant to this SECTION 5.1(ii) the
filing of any other registration statement otherwise required to be prepared and
filed pursuant to this SECTION 5.1 during the twelve (12) month period ended on
the date of the relevant request pursuant to SECTION 5.1(i).
(iii) Whenever the Company shall have received a demand
pursuant to SECTION 5.1(i) to effect the registration of any Registrable
Securities, the Company shall promptly give written notice of such proposed
registration to all Holders. Any such Holder may, within twenty (20) days after
receipt of such notice, request in writing that all of such Holder's Registrable
Securities, or any portion thereof designated by such Holder, be included in the
registration.
(iv) Subject to SECTION 5.6, in connection with
an underwritten offering, the Company and, with the approval of the Company,
other holders of Common Stock (other than Holders) shall be given the
opportunity to include shares of Common Stock in such offering ("Other Included
Shares").
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5.2. Following receipt of a request for a Demand
Registration, the Company shall:
(i) File the registration statement with the
Commission as promptly as practicable, and shall use all reasonable efforts to
have the registration declared effective under the Securities Act as soon as
reasonably practicable, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence and complete other
actions that are reasonably necessary to effect a registered public offering.
(ii) Use all reasonable efforts to keep the
registration statement Continuously Effective for up to two hundred seventy
(270) days or until such earlier date as of which all the Registrable Securities
under the registration statement shall have been disposed of in the manner
described in the Registration Statement, or such earlier time as the Company
would not have any obligation to include the Registrable Securities that have
not been disposed of in the manner described in the Registration Statement in a
registration pursuant to SECTION 5 or SECTION 4 or the Registerable Securities
are no longer Registerable Securities under the definition of "Registrable
Securities." Notwithstanding the foregoing, if for any reason the effectiveness
of a registration pursuant to this SECTION 5 is suspended or, in the case of a
Demand Registration, postponed as permitted by SECTION 5.1(ii), the foregoing
period shall be extended by the aggregate number of days of such suspension or
postponement.
5.3. The Company shall be obligated to effect no
more than a total of two (2) Demand Registrations. For purposes of the preceding
sentence, registration shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective, (ii) if after
such registration statement has become effective, such registration or the
related offer, sale or distribution of Registrable Securities thereunder is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason not
attributable to the Selling Holders and such interference is not thereafter
eliminated, or (iii) if the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such registration are not
satisfied or waived, other than by reason of a failure on the part of the
Selling Holders. If the Company shall have complied with its obligations under
this Agreement, a right to a Demand Registration pursuant to this SECTION 5
shall be deemed to have been satisfied upon the earlier of the date as of which
all of the Registrable Securities included therein shall have been disposed of
pursuant to the Registration Statement or the date as of which such Demand
Registration shall have been Continuously Effective for a period of two hundred
seventy (270) days, or such earlier time as the Company would not have any
obligation to include the Registrable Securities that have not been disposed of
in the manner described in the Registration Statement in a registration pursuant
to SECTION 5 or SECTION 4, or the Registerable Securities are no longer
Registerable Securities under the definition of "Registrable Securities." Any
Demand Registration Statement which, after filing with the Commission is
withdrawn by the Holders, shall be deemed to have been effective in determining
the number of Demand Registrations the Company is obligated to effect hereunder.
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5.4. A registration pursuant to this SECTION 5
shall be on such appropriate registration form of the Commission as shall (i) be
selected by the Company and be reasonably acceptable to the Demanding Holders
and (ii) permit the disposition of the Registrable Securities in accordance with
the intended method or methods of disposition specified in the request pursuant
to SECTION 5.1(i).
5.5. If any registration pursuant to SECTION 5
involves an underwritten offering (whether on a "firm," "best efforts" or "all
reasonable efforts" basis or otherwise), or an agented offering, the Demanding
Holders, shall have the right to select the underwriter or underwriters and
manager or managers to administer such underwritten offering or the placement
agent or agents for such agented offering; PROVIDED, HOWEVER, that each Person
so selected shall be reasonably acceptable to the Company.
5.6. Whenever the Company shall effect a
registration pursuant to this SECTION 5 in connection with an underwritten
offering by one or more Selling Holders of Registrable Securities: if the
Underwriters' Representative or Agent advises each such Selling Holder in
writing that, in its opinion, the amount of securities requested to be included
in such offering (whether by Selling Holders or others) exceeds the amount which
can be sold in such offering within a price range acceptable to the Demanding
Holders, securities shall be included in such offering and the related
registration, to the extent of the amount which can be sold within such price
range, and on a pro rata basis among all Selling Holders; first for the account
of the Demanding Holders, second by all other Selling Holders and third by the
Company and other holders with respect to the Other Included Shares.
Section 6. REGISTRATION PROCEDURES. Whenever required under
SECTION 4 or SECTION 5 to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as practicable:
6.1. Prepare and file with the Commission a
registration statement with respect to such Registrable Securities and use the
Company's best efforts to cause such registration statement to become effective;
PROVIDED, HOWEVER, that before filing a registration statement or prospectus or
any amendments or supplements thereto, including documents incorporated by
reference after the initial filing of the registration statement and prior to
effectiveness thereof, the Company shall furnish to one firm of counsel for the
Selling Holders (selected by the Demanding Holders) copies of all such documents
in the form substantially as proposed to be filed with the Commission at least
four (4) business days prior to filing for review and comment by such counsel,
which opportunity to comment shall include an absolute right to control or
contest disclosure if the applicable Selling Holder reasonably believes that it
may be subject to controlling person liability under applicable securities laws
with respect thereto.
6.2. Prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection with such
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registration statement as may be necessary to comply with the provisions of the
Securities Act and rules thereunder with respect to the disposition of all
securities covered by such registration statement. If the registration is for an
underwritten offering, the Company shall amend the registration statement or
supplement the prospectus whenever required by the terms of the underwriting
agreement entered into pursuant to SECTION 6.2. The Company shall amend the
registration statement or supplement the prospectus so that it will remain
current and in compliance with the requirements of the Securities Act for the
period after its effective date during which the Demand Registration is to be
kept Continuously Effective by the Company pursuant to SECTION 5.2(ii), and if
during such period any event or development occurs as a result of which the
registration statement or prospectus contains a misstatement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, the Company shall promptly notify
each Selling Holder, amend the registration statement or supplement the
prospectus so that each will thereafter comply with the Securities Act and
furnish to each Selling Holder of Registrable Securities such amended or
supplemented prospectus, which each such Holder shall thereafter use in the
Transfer of Registrable Securities covered by such registration statement.
Pending such amendment or supplement each such Holder shall cease making offers
or Transfers of Registrable Securities pursuant to the prior prospectus. In the
event that any Registrable Securities included in a registration statement
subject to, or required by, this Agreement remain unsold at the end of the
period during which the Company is obligated to use all reasonable efforts to
maintain the effectiveness of such registration statement, the Company may file
a post-effective amendment to the registration statement for the purpose of
removing such Securities from registered status.
6.3. Furnish to each Selling Holder of
Registrable Securities, without charge, such number of copies of the
registration statement, any pre-effective or post-effective amendment thereto,
the prospectus, including each preliminary prospectus and any amendments or
supplements thereto, in each case in conformity with the requirements of the
Securities Act and the rules thereunder, and such other related documents as any
such Selling Holder may reasonably request in order to facilitate the
disposition of Registrable Securities owned by such Selling Holder.
6.4. Use all reasonable efforts (i) to register
and qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such states or jurisdictions as shall be
reasonably requested by the Underwriters' Representative or Agent (as
applicable, or if inapplicable, the Demanding Holders) and (ii) to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of the offer and transfer of any of the Registrable
Securities in any jurisdiction, at the earliest possible moment; PROVIDED,
HOWEVER, that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such state or jurisdiction.
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6.5. In the event of any underwritten or agented
offering, enter into and perform the Company's obligations under an underwriting
or agency agreement (including indemnification and contribution obligations of
underwriters or agents), in usual and customary form, with the managing
underwriter or underwriters of or agents for such offering. The Company shall
also cooperate with the Demanding Holders and the Underwriters' Representative
or Agent for such offering in the marketing of the Registrable Securities,
including making available the Company's officers, accountants, counsel,
premises, books and records for such purpose, but the Company shall not be
required to incur any material out-of-pocket expense pursuant to this sentence.
6.6. Promptly notify each Selling Holder of any
stop order issued or threatened to be issued by the Commission in connection
therewith (and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered).
6.7. Make generally available to the Company's
security holders copies of all periodic reports, proxy statements, and other
information referred to in SECTION 11.1 and an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act no later than 90 days
following the end of the 12-month period beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of each
registration statement filed pursuant to this Agreement.
6.8. Make available for inspection by any
Selling Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter (but not more than one
firm of counsel to such Selling Holders), all financial and other information as
shall be reasonably requested by them, and provide the Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter the opportunity to discuss the business affairs
of the Company with its principal executives and independent public accountants
who have certified the audited financial statements included in such
registration statement, in each case all as necessary to enable them to exercise
their due diligence responsibility under the Securities Act; PROVIDED, HOWEVER,
that information that the Company determines, in good faith, to be confidential
and which the Company advises such Person in writing, is confidential shall not
be disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company or the related Selling Holder of Registrable
Securities agrees to be responsible for such Person's breach of confidentiality
on terms reasonably satisfactory to the Company.
6.9. Use the Company's commercially reasonable
efforts to obtain a so-called "comfort letter" from its independent public
accountants, and legal opinions of counsel to the Company addressed to the
Selling Holders, in customary form and covering such matters of the type
customarily covered by such letters, and in a form that shall be reasonably
satisfactory to Demanding Holders. The Company shall furnish to each Selling
Holder a signed counterpart of any such comfort letter or legal opinion.
Delivery of any such opinion or comfort letter shall be subject to the recipient
furnishing such written
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representations or acknowledgments as are customarily provided by selling
shareholders who receive such comfort letters or opinions.
6.10. Provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement.
6.11. Use all reasonable efforts to cause the
Registrable Securities covered by such registration statement (i) if the Common
Stock is then listed on a securities exchange or included for quotation in a
recognized trading market, to continue to be so listed or included for a
reasonable period of time after the offering, and (ii) to be registered with or
approved by such other United States or state governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Company to enable the Selling Holders of Registrable Securities to consummate
the disposition of such Registrable Securities.
6.12. Use the Company's reasonable efforts to
provide a CUSIP number for the Registrable Securities prior to the effective
date of the first registration statement including Registrable Securities.
6.13. Take such other actions as are reasonably
required in order to expedite or facilitate the disposition of Registrable
Securities included in each such registration.
Section 7. HOLDERS' OBLIGATIONS. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement with respect to the Registrable Securities of any Selling Holder of
Registrable Securities that such Selling Holder shall:
7.1. Furnish to the Company such information
regarding such Selling Holder, the number of the Registrable Securities owned
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Selling Holder's Registrable
Securities, and to cooperate with the Company in preparing such registration.
7.2. If applicable, agree to sell their Registrable
Securities to the underwriters at the same price and on substantially the same
terms and conditions as the Company or the other Persons on whose behalf the
registration statement was being filed have agreed to sell their securities,
and to execute the underwriting agreement agreed to by the Demanding Holders
(in the case of a registration under SECTION 5), or the Company and the Selling
Holders (in the case of a registration under SECTION 4).
Section 8. EXPENSES OF REGISTRATION. Expenses in connection
with registrations pursuant to this Agreement shall be allocated and paid as
follows:
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8.1. With respect to each Demand Registration, the
Company shall bear and pay all expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect
to such Demand Registration for each Selling Holder (which right may be
assigned to any Person to whom Registrable Securities are Transferred as
permitted by SECTION 9), including all registration, filing and The Nasdaq
Stock Market's National Market fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the reasonable fees and
disbursements of counsel for the Company, and of the Company's independent
public accountants, including the expenses of "cold comfort" letters required
by or incident to such performance and compliance (the "Registration
Expenses"), but excluding underwriting discounts and commissions relating to
Registrable Securities (which shall be paid on a pro rata basis by the Selling
Holders).
8.2. The Company shall bear and pay all
Registration Expenses incurred in connection with any Piggyback Registrations
or Piggyback Shelf Registration pursuant to SECTION 4 for each Selling Holder
(which right may be Transferred to any Person to whom Registrable Securities
are Transferred as permitted by SECTION 9), but excluding underwriting
discounts and commissions relating to Registrable Securities (which shall be
paid on a pro rata basis by the Selling Holders of Registrable Securities).
8.3. Any failure of the Company to pay any
Registration Expenses as required by this SECTION 7 shall not relieve the
Company of its obligations under this Agreement.
Section 9. INDEMNIFICATION; CONTRIBUTION. If any Registrable
Securities are included in a registration statement under this Agreement,
including a Shelf Registration:
9.1. To the extent permitted by applicable law, the
Company shall indemnify and hold harmless each Selling Holder, each Person, if
any, who controls such Selling Holder within the meaning of the Securities Act,
and each officer, director, partner, employee, agent and consultant of such
Selling Holder and such controlling Person, against any and all losses, claims,
damages, liabilities and expenses (joint or several), including attorneys' fees
and disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation,
or to which any of the foregoing Persons may become subject under the
Securities Act, the Exchange Act or other federal or state laws, insofar as
such losses, claims, damages, liabilities and expenses arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"):
(i) Any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any amendments
or supplements thereto;
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(ii) The omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or
(iii) Any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
applicable state securities law;
PROVIDED, HOWEVER, that the indemnification required by this SECTION 8.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or expense to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in
connection with such registration; PROVIDED, FURTHER, that the indemnity
agreement contained in this SECTION 8 shall not apply to any underwriter to the
extent that any such loss is based on or arises out of an untrue statement or
alleged untrue statement of a material fact, or an omission or alleged omission
to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or
alleged untrue statement, or such omission or alleged omission, and a copy of
the final prospectus has not been sent or given to such person at or prior to
the confirmation of sale to such person if such underwriter was under an
obligation to deliver such final prospectus and failed to do so. The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers, directors, agents and employees and each person who controls such
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Selling Holders.
9.2. To the extent permitted by applicable law, each Selling
Holder shall indemnify and hold harmless the Company, each of its directors,
each of its officers who shall have signed the registration statement, each
Person, if any, who controls the Company within the meaning of the Securities
Act, any other Selling Holder, any controlling Person of any such other Selling
Holder and each officer, director, partner, and employee of such other Selling
Holder and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration; PROVIDED, HOWEVER, that the indemnification required by this
SECTION 8.2 shall not apply to amounts paid in settlement of
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any such loss, claim, damage, liability or expense if settlement is effected
without the consent of the relevant Selling Holder of Registrable Securities,
which consent shall not be unreasonably withheld.
9.3. Promptly after receipt by an indemnified party under this
SECTION 8 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this SECTION 8, such indemnified party shall deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and disbursements and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time following the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this SECTION
8 but shall not relieve the indemnifying party of any liability that it may have
to any indemnified party otherwise than pursuant to this SECTION 8. Any fees and
expenses incurred by the indemnified party (including any fees and expenses
incurred in connection with investigating or preparing to defend such action or
proceeding) shall be paid to the indemnified party, as incurred, within thirty
(30) days of written notice thereof to the indemnifying party; PROVIDED,
HOWEVER, that if it is ultimately determined that an indemnified party is not
entitled to indemnification hereunder such indemnified party shall be obligated
to repay the indemnifying party. Any such indemnified party shall have the right
to employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses or (ii) the indemnifying party
shall have failed to promptly assume the defense of such action, claim or
proceeding or (iii) the named parties to any such action, claim or proceeding
(including any impleaded parties) include both such indemnified party and the
indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying party and
that the assertion of such defenses would create a conflict of interest such
that counsel employed by the indemnifying party could not faithfully represent
the indemnified party (in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action, claim or proceeding on behalf of
such indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or proceeding or
separate but substantially similar or related actions, claims or proceedings in
the same jurisdiction arising out of the same general
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allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all such indemnified parties. No indemnifying party
shall be liable to an indemnified party for any settlement of any action,
proceeding or claim without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld.
9.4. If the indemnification required by this SECTION 8 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this SECTION 8:
(i) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as the relative benefits received by indemnifying party and indemnified parties.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any Violation has been
committed by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Violation. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in SECTION 8.1 and SECTION 8.2, any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this SECTION 8.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in SECTION 8.4(i). 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.
9.5. If indemnification is available under this SECTION 8, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 8 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in SECTION 8.4.
9.6. The obligations of the Company and the Selling Holders of
Registrable Securities under this SECTION 8 shall survive the completion of any
offering of Registrable Securities pursuant to a registration statement under
this Agreement, and otherwise.
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Section 10. TRANSFER OF REGISTRATION RIGHTS. Rights with
respect to Registrable Securities may be Transferred as follows: (i) the rights
of a Holder to require a Demand Registration pursuant to SECTION 5 may be
Transferred to any Person in connection with the Transfer to such Person by such
Holder of at least 1,000 shares or share equivalents of Registrable Securities,
and (ii) the rights of a Holder to participate in a Piggyback or Piggyback Shelf
Registration pursuant to SECTION 4 may be Transferred by such Holder to any
Person in connection with the Transfer of Registrable Securities to such Person,
in all cases, if (x) any such Transferee that is not a party to this Agreement
shall have executed and delivered to the Secretary of the Company a properly
completed agreement substantially in the form of EXHIBIT A, and (y) the
Transferor shall have delivered to the Secretary of the Company, no later than
15 days following the date of the Transfer, written notification of such
Transfer setting forth the name of the Transferor, name and address of the
Transferee, and the number of Registrable Securities which shall have been so
Transferred.
Section 11. HOLDBACK. Each Holder entitled pursuant to this
Agreement to have Registrable Securities included in a Demand Registration
statement prepared pursuant to this Agreement, if so requested by the
Underwriters' Representative or Agent in connection with an offering of any
Registrable Securities, shall not effect any public sale or distribution of
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, including a sale pursuant to Rule 144
under the Securities Act (except as part of such underwritten or agented
registration), during the 5-day period prior to, and during such period as the
Underwriter's Representative or Agent may request, not to exceed a period of 180
days, beginning on, the date such registration statement is declared effective
under the Securities Act by the Commission PROVIDED that such Holder is timely
notified of such effective date in writing by the Company or such Underwriters'
Representative or Agent, and PROVIDED, FURTHER, that this SECTION 11 shall apply
to a distribution of Registerable Securities pursuant to Section 3. In order to
enforce the foregoing covenant, the Company shall be entitled to impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder until the end of such period.
Section 12. COVENANTS OF THE COMPANY. The Company hereby
agrees and covenants as follows:
12.1. The Company shall file as and when applicable, on a
timely basis, all reports required to be filed by it under the Exchange Act. If
the Company is not required to file reports pursuant to the Exchange Act, upon
the request of any Holder of Registrable Securities, the Company shall make
publicly available the information specified in Rule 144 of the Securities Act,
and take such further action as may be reasonably required from time to time and
as may be within the reasonable control of the Company, to enable the Holders to
Transfer Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 under the
Securities Act or any similar rule or regulation hereafter adopted by the
Commission.
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12.2. (i) The Company shall not, and shall not permit its
majority owned subsidiaries to, effect any public sale or distribution of any
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, during the five business days prior to,
and during the 180-day period beginning on, the commencement of a public
distribution of the Registrable Securities pursuant to any registration pursuant
to this Agreement (other than by the Company pursuant to such registration);
PROVIDED, HOWEVER, that the provisions of this SECTION 12.2(i) shall not apply
to a distribution of Registerable Securities pursuant to SECTION 3.
(ii) Any agreement entered into after the date of this
Agreement pursuant to which the Company or any of its majority owned
subsidiaries issues or agrees to issue any privately placed securities similar
to any issue of the Registrable Securities (other than (x) shares of Common
Stock pursuant to a stock incentive, stock option, stock bonus, stock
subscription or other employee benefit plan of the Company approved by its Board
of Directors, and (y) securities issued to Persons in exchange for ownership
interests in any Person in connection with a business combination in which the
Company or any of its majority owned subsidiaries is a party) shall contain a
provision whereby holders of such securities agree not to effect any public sale
or distribution of any such securities during the periods described in the first
sentence of SECTION 11.2(i), in each case including a sale pursuant to Rule 144
under the Securities Act (unless such Person is prevented by applicable statute
or regulation from entering into such an agreement) PROVIDED, HOWEVER, that the
provisions of this SECTION 12.2(ii) shall not apply to a distribution of
Registerable Securities pursuant to SECTION 3.
12.3. The Company shall not, directly or indirectly, (x) enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation or (y) Transfer or agree to Transfer all or
substantially all the Company's assets, unless prior to such merger,
consolidation, reorganization or asset Transfer, the surviving corporation or
the Transferee, respectively, shall have agreed in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to include the securities
which the Holders of Registrable Securities would be entitled to receive in
exchange for Registrable Securities pursuant to any such merger, consolidation
or reorganization.
12.4. The Company shall not grant to any Person (other than a
Holder of Registrable Securities) any registration rights with respect to
securities of the Company, or enter into any agreement, that would (i) entitle
the holder thereof to have securities owned by it included in a Demand
Registration or (ii) be inconsistent with the terms of this Agreement.
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Section 13. AMENDMENT, MODIFICATION AND WAIVERS; FURTHER
ASSURANCES.
(i) This Agreement may be amended with the consent of the
Company, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent of Holders owning Registrable Securities
possessing a Majority of the Registrable Securities then outstanding to such
amendment, action or omission to act.
(ii) No waiver of any terms or conditions of this Agreement
shall operate as a waiver of any other breach of such terms and conditions or
any other term or condition, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision hereof.
No written waiver hereunder, unless it by its own terms explicitly provides to
the contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(iii) Each of the parties hereto shall execute all such
further instruments and documents and take all such further action as any other
party hereto may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section 14. ASSIGNMENT; BENEFIT. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, assigns, executors, administrators or
successors; PROVIDED, HOWEVER, that except as specifically provided herein with
respect to certain matters, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by the Company
without the prior written consent of Holders owning Registrable Securities
possessing a majority in number of the Registrable Securities outstanding on the
date as of which such delegation or assignment is to become effective. A Holder
may Transfer its rights with respect to requiring Demand Registrations and
Piggyback Registrations hereunder to a successor in interest to the Registrable
Securities owned by such assignor only as permitted by SECTION 9.
Section 15. MISCELLANEOUS.
15.1. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY
RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR
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PRINCIPAL PLACE OF BUSINESS OF THE COMPANY OR HOLDERS, THE COMPANY HEREBY
CONSENTS AND AGREES THAT THE SUPREME COURT OF NEW YORK COUNTY, NEW YORK OR, AT
HOLDER'S OPTION, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK SHALL HAVE THE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN THE COMPANY AND HOLDER(S) PERTAINING TO THIS AGREEMENT OR
ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. THE COMPANY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES ANY OBJECTION WHICH
COMPANY MAY HAVE BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS AND HEREBY CONSENT TO THE GRANTING FOR SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. THE COMPANY HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREE THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT
THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETE UPON THE EARLIER OF THE COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3)
DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF A HOLDER TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE
ENFORCEMENT BY A HOLDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.
15.2. WAIVER OF RIGHT TO TRIAL BY JURY. THE
COMPANY AND HOLDERS WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT
OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE COMPANY
AND THE HOLDERS WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH IN EACH CASE
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, THE COMPANY AND HOLDERS AGREE
AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE COMPANY AND HOLDERS TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY. THE COMPANY AND HOLDERS ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO
CONSULT WITH COUNSEL REGARDING THIS
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SECTION THAT THEY FULLY UNDERSTAND ITS TERMS, CONTENT AND EFFECT,
AND THAT THEY VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF
THIS SECTION.
15.3. NOTICES. All notices and requests given pursuant to this
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified, return receipt requested), confirmed facsimile or
overnight air courier guaranteeing next business day delivery to the relevant
address specified on SCHEDULE I to this Agreement or in the relevant agreement
in the form of EXHIBIT A whereby such party became bound by the provisions of
this Agreement. Except as otherwise provided in this Agreement, the date of each
such notice and request shall be deemed to be, and the date on which each such
notice and request shall be deemed given shall be: at the time delivered, if
personally delivered or mailed; when receipt is acknowledged, if sent by
facsimile; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next business day delivery.
15.4. ENTIRE AGREEMENT; INTEGRATION. This Agreement supersedes
all prior agreements between or among any of the parties hereto with respect to
the subject matter contained herein and therein, and such agreements embody the
entire understanding among the parties relating to such subject matter.
15.5. INJUNCTIVE RELIEF. Each of the parties hereto
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that in the event of such a
breach hereof the aggrieved party may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach hereof. By seeking or obtaining
any such relief, the aggrieved party shall not be precluded from seeking or
obtaining any other relief to which it may be entitled.
15.6. SECTION HEADINGS. Section headings are for convenience
of reference only and shall not affect the meaning of any provision of this
Agreement.
15.7. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
15.8. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
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15.9. FILING. A copy of this Agreement and of all amendments
thereto shall be filed at the principal executive office of the Company and with
the transfer agent for the Common Stock of the Company.
15.10. TERMINATION. This Agreement may be terminated or
amended at any time by a written instrument signed by the Holders of greater
than seventy-five percent (75%) of the Registerable Securities. Unless sooner
terminated in accordance with the preceding sentence, this Agreement (other than
SECTION 8 hereof) shall terminate in its entirety at the earlier of (i) such
date as there shall be no Registrable Securities outstanding, (ii) such date as
the registration statement filed pursuant to SECTION 3.1 shall have remained
Continuously Effective for thirty-six (36) months, or (iii) the fifth
anniversary of the date hereof, PROVIDED that any shares of Common Stock
previously subject to this Agreement shall not be Registrable Securities
following the sale of any such shares in an offering registered pursuant to this
Agreement.
15.11. EXPENSES, ETC. Whether or not the transactions
contemplated hereby are consummated, the Company agrees, jointly and severally
to pay all costs and expenses (including reasonable attorneys' fees of a special
counsel and, if reasonably required, local or other counsel) incurred by the
Holders in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Note Documents (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend),
including expenses incurred in any appeals, any rights under this Agreement or
the Note Documents or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement or the
Note Documents, or by reason of being a Holder, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or in connection with any work-out or restructuring
of the transactions contemplated hereby and by the Note Documents. The Company
will pay, and will save each Holder harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders (other than those
retained by such Holder). The obligations of the Company under this SECTION
14.11 will survive the enforcement, amendment or waiver of any provision of this
Agreement or the Note Documents, and the termination of this Agreement and the
Note Documents.
15.12. NO THIRD PARTY BENEFICIARIES. Nothing herein expressed
or implied is intended to confer upon any person, other than the parties hereto
or their respective permitted assigns, successors, heirs and legal
representatives, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
15.13. INTERPRETATION. No provision of this Agreement or any
of the other Note Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured,
drafted or dictated such provision.
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