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EXHIBIT 4.3
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PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
Dated as of August 8, 1997
by and among
HIGH VOLTAGE ENGINEERING CORPORATION
and
CIBC WOOD GUNDY SECURITIES CORP. and
PAINEWEBBER INCORPORATED,
as Initial Purchasers
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TABLE OF CONTENTS
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Page
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1. Definitions...................................................... 1
2. Exchange Offer................................................... 5
3. Shelf Registration............................................... 8
4. Additional Dividends............................................. 10
5. Registration Procedures.......................................... 12
6. Registration Expenses............................................ 22
7. Indemnification.................................................. 24
8. Rules 144 and 144A............................................... 28
9. Underwritten Registrations....................................... 28
10. Miscellaneous.................................................... 29
(a) Remedies.................................................. 29
(b) No Inconsistent Agreements................................ 29
(c) Adjustments Affecting Registrable Shares.................. 29
(d) Amendments and waivers.................................... 29
(e) Notices................................................... 30
(f) Successors and Assigns.................................... 31
(g) Counterparts.............................................. 31
(h) Headings.................................................. 31
(i) Governing Law............................................. 31
(j) Severability.............................................. 31
(k) Entire Agreement.......................................... 31
(l) Shares Held by the Company or Its Affiliates.............. 32
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PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT"), dated as
of August 7, 1997, by and among HIGH VOLTAGE ENGINEERING CORPORATION, a
Massachusetts corporation (the "COMPANY"), and CIBC WOOD GUNDY SECURITIES CORP.
and PAINEWEBBER INCORPORATED (together, the "INITIAL PURCHASERS").
This Agreement is entered into in connection with the Securities Purchase
Agreement, dated as of August 5, 1997, by and among the Company and the Initial
Purchasers (the "PURCHASE AGREEMENT") relating to the sale by the Company to the
Initial Purchasers of $135,000,000 aggregate principal amount of 10 1/2% Senior
Notes due 2004 of the Company (the "NOTES") and 33,000 Units (the "UNITS"), each
Unit consisting of (i) one share of the Company's 12-1/2% Series A Senior
Redeemable Preferred Stock (the "PREFERRED SHARES"), (ii) one warrant entitling
the holder thereof to purchase .00250736 shares of Common Stock, par value $0.01
per share, of the Company (the "WARRANTS") and (iii) .00250736 shares of Common
Stock, par value $0.01 per share, of the Company (the "Common Shares" and,
together with the Notes, Units, Preferred Shares and Warrants, the
"SECURITIES").
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement for the benefit of the Initial Purchasers. The execution and
delivery of this Agreement is a condition to the Initial Purchasers, obligation
to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
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As used in this Agreement, the following terms shall have the following
meanings:
ADDITIONAL DIVIDENDS: See Section 4.
ADVICE: See Section 5.
APPLICABLE PERIOD: See Section 2(b).
CLOSING: See Purchase Agreement.
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COMPANY: See the introductory paragraph to this Agreement.
EFFECTIVENESS DATE: The 135th day after the Issue Date.
EFFECTIVENESS PERIOD: See Section 3.
EVENT DATE: See Section 4(b).
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
EXCHANGE OFFER: See Section 2(a).
EXCHANGE REGISTRATION STATEMENT: See Section 2(a).
EXCHANGE SHARES: See Section 2(a).
FILING DATE: The 45th day after the Issue Date.
HOLDER: Any holder of a Registrable Share or Registrable Shares.
INDEMNIFIED PERSON: See Section 7(c).
INDEMNIFYING PERSON: See Section 7(c).
INITIAL PURCHASERS: See the introductory paragraph of this Agreement.
INITIAL SHELF REGISTRATION: See Section 3(a).
INSPECTORS: See Section 5(o).
ISSUE DATE: The date on which the Preferred Shares are sold to the
Purchaser pursuant to the Purchase Agreement.
NASD: See Section 5(s).
NOTES: See the introductory paragraphs of this Agreement.
PARTICIPANT: See Section 7(a).
PARTICIPATING BROKER-DEALER: See Section 2(b).
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PERSON: An individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or other
legal entity.
PREFERRED SHARES: See the introductory paragraphs to this Agreement.
PRIVATE EXCHANGE: See Section 2(a).
PRIVATE EXCHANGE SHARES: See Section 2(b).
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Shares covered by such Registration Statement, 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: See the introductory paragraphs to this Agreement.
RECORDS: See Section 5(o).
REGISTRABLE SHARES: The Preferred Shares upon original issuance of the
Preferred Shares to the Initial Purchasers under the Purchase Agreement
(including the Option Shares) and at all times subsequent thereto and, if
issued, the Private Exchange Shares, until in the case of such Preferred Shares
or Private Exchange Shares, as the case may be, (i) a Registration Statement
covering such Preferred Shares or Private Exchange Shares, as the case may be,
has been declared effective by the SEC and such Preferred Shares or Private
Exchange Shares, as the case may be, have been disposed of in accordance with
such effective Registration Statement, (ii) such Preferred Shares or Private
Exchange Shares, as the case may be, are sold in compliance with Rule 144, (iii)
in the case of any Preferred Share, such Preferred Share has been exchanged for
an Exchange Share or Exchange Shares pursuant to an Exchange Offer or (iv) such
Preferred Shares or Private Exchange Shares, as the case may be, cease to be
outstanding.
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REGISTRATION DEFAULT: See Section 4(a).
REGISTRATION STATEMENT: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, which covers
any of the Registrable Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
RESTATED ARTICLES: Prior to the Closing, the Certificate of Vote of
Directors Establishing a Series of a Class of Stock duly adopted by the Board of
Directors of the Company setting forth the rights, preferences and priorities of
the Preferred Shares and filed with, and accepted for filing, so as to be
effective, by, the Secretary of State of Massachusetts prior to the Closing,
and, after the Closing, the Restated Articles of Organization duly adopted by
the Board of Directors of the Company setting forth the rights, preferences and
priorities of the Preferred Shares and filed with, and accepted for filing, by
the Secretary of State of Massachusetts.
RULE 144: Rule 144 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.
RULE 144A: Rule 144A 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.
RULE 415: Rule 415 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.
SEC: The Securities and Exchange Commission.
SECURITIES: See the introductory paragraphs to this Agreement.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
SHELF NOTICE: See Section 2(c).
SHELF REGISTRATION: See Section 3(b).
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SUBSEQUENT SHELF REGISTRATION: See Section 3(b).
TRANSFER AGENT: The Transfer Agent for the Preferred Shares, the Exchange
Preferred Shares and/or the Private Exchange Preferred Shares, as the context
may require.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriters) for reoffering to
the public.
UNITS: See the introductory paragraphs to this Agreement.
WARRANTS: See the introductory paragraphs to this Agreement.
2. EXCHANGE OFFER
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the SEC, the Company agrees to use its best efforts to file
with the SEC as soon as practicable, but in no event later than the Filing Date,
an offer to exchange (the "EXCHANGE OFFER") any and all of the Registrable
Shares for a like aggregate liquidation value of preferred equity securities of
the Company which are substantially identical to the Preferred Shares (the
"EXCHANGE SHARES") (and which are entitled to the benefits of the Restated
Articles), except that the Exchange Shares shall have been registered pursuant
to an effective Registration Statement under the Securities Act. The Exchange
Offer will be registered under the Securities Act on the appropriate form (the
"EXCHANGE REGISTRATION Statement") and will comply with all applicable tender
offer rules and regulations under the Exchange Act. The Company agrees to use
its best efforts to (x) cause the Exchange Registration Statement to become
effective under the Securities Act on or before the Effectiveness Date; (y) keep
the Exchange Offer open for at least 30 days (or longer if required by
applicable law) after the date that notice of the Exchange Offer is mailed to
Holders; and (z) consummate the Exchange Offer on or prior to the 60th day
following the date on which the Exchange Registration Statement is declared
effective. Each Holder who participates in the Exchange Offer will be required
to represent that any Exchange Shares received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
person to participate in the distribution of the Exchange Shares, and that such
Holder is not an affiliate of the Company within the meaning of Rule 405 under
the Securities Act or if it is an affiliate, that it will comply with the
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registration and prospectus delivery requirements of the Securities Act, to the
extent applicable. Upon consummation of the Exchange Offer in accordance with
this Section 2, the provisions of this Agreement shall continue to apply,
MUTATIS MUTANDIS, solely with respect to Exchange Shares held by Participating
Broker-Dealers (as defined below), and the Company shall have no further
obligation to register Registrable Shares pursuant to Section 3 of this
Agreement.
(b) The Company shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Shares received by such broker-dealer in the Exchange Offer (a "PARTICIPATING
BROKER-DEALER"), whether such positions or policies have been publicly
disseminated by the Staff of the SEC or such positions or policies, in the
reasonable judgment of the Initial Purchasers, represent the prevailing views of
the Staff of the SEC. Such "Plan of Distribution" section shall also allow the
use of the prospectus by all persons subject to the prospectus delivery
requirements of the Securities Act, including all Participating Broker-Dealers,
and include a statement describing the means by which Participating
Broker-Dealers may resell the Exchange Shares.
The Company shall use its best efforts to keep the Exchange Registration
Statement effective and to amend and supplement the Prospectus contained
therein, in order to permit such Prospectus to be lawfully delivered by all
persons subject to the prospectus delivery requirements of the Securities Act
for such period of time as such persons must comply with such requirements in
order to resell the Exchange Shares, PROVIDED that such period shall not exceed
90 days (or such longer period if extended pursuant to the last paragraph of
Section 5) (the "APPLICABLE PERIOD").
If, prior to consummation of the Exchange Offer, either of the Initial
Purchasers holds any Preferred Shares acquired by it and having, or which are
reasonably likely to be determined to have, the status of an unsold allotment in
the initial distribution, the Company upon the request of such Initial Purchaser
shall, simultaneously with the delivery of the Exchange Shares in the Exchange
Offer, issue and deliver to such Initial Purchaser, in exchange (the "PRIVATE
EXCHANGE") for the Preferred Shares held by such Initial Purchaser, a like
liquidation value of preferred equity securities of the Company that are
identical in all material respects to the Exchange Shares (the "PRIVATE EXCHANGE
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SHARES") (and which are issued pursuant to the same certificate of designation
as the Exchange Shares). The Private Exchange Shares shall bear the same CUSIP
number as the Exchange Shares.
Dividends on the Exchange Shares and any Private Exchange Shares will
accrue from the later of (A) the last dividend payment date on which dividends
were paid on the Preferred Shares surrendered in exchange therefor or, (B) if no
dividends have been paid on the Preferred Shares, from the Issue Date.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) utilize the services of a depositary for the Exchange offer with
an address in Boston, Massachusetts; and
(iii) permit Holders to withdraw tendered Preferred Shares at any time
prior to the close of business, New York time, on the last business day on
which the Exchange Offer shall remain open.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Preferred Shares tendered and not validly
withdrawn pursuant to the Exchange offer or the Private Exchange, as the
case may be;
(ii) deliver to the Transfer Agent for cancellation all Preferred
Shares so accepted for exchange; and
(iii) cause the Transfer Agent to countersign and deliver promptly to
each Holder of Preferred Shares, Exchange Shares or Private Exchange
Shares, as the case may be, equal in liquidation value to the Preferred
Shares of such Holder so accepted for exchange.
The Exchange Shares and the Private Exchange Shares shall be issued
pursuant to the Restated Articles, will vote and consent together on all matters
with the Preferred Shares as one class to the extent the Preferred Shares have
voting rights pursuant to the Restated Articles or as provided by applicable
law, and will not have the right to vote or
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consent as a class separate from the Preferred Shares on any matter except as
otherwise provided in the Restated Articles or under applicable law.
(c) If (1) prior to the consummation of the Exchange Offer, the Company
or Holders of at least a majority in aggregate liquidation value of the
Registrable Shares reasonably determine in good faith that (i) the Exchange
Shares would not, upon receipt, be tradeable by such Holders which are not
affiliates (within the meaning of the Securities Act) of the Company without
restriction under the Securities Act and without restrictions under applicable
state securities laws, or (ii) after conferring with counsel, the SEC is
unlikely to permit the consummation of the Exchange offer prior to 60 days after
the Effectiveness Date (in which case the Company may withdraw the Exchange
Registration Statement, if filed, or elect not to file it, if not already
filed), (2) subsequent to the Exchange Date if the Initial Purchasers shall not
have sold all of the Registrable Securities initially purchased by it to
unaffiliated investors and if the Initial Purchasers so requests, or (3) the
Exchange Offer is commenced and not consummated within 195 days of the Issue
Date, then the Company shall promptly deliver to the Holders written notice
thereof (the "SHELF NOTICE") and shall file an Initial Shelf Registration
pursuant to Section 3. Following the delivery of a Shelf Notice to the Holders
of Registrable Shares, the Company shall not have any further obligation to
conduct the Exchange Offer or the Private Exchange under this Section 2.
3. Shelf Registration
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If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) INITIAL SHELF REGISTRATION. The Company shall prepare and file with
the SEC a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Shares (the "INITIAL
SHELF REGISTRATION"). The Company shall use its best efforts to file with the
SEC the Initial Shelf Registration within 30 days of the delivery of the Shelf
Notice. The Initial Shelf Registration shall be on Form S-1 or another
appropriate form permitting registration of such Registrable Shares for resale
by such Holders in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). Except to the extent required
by any agreement to which the Company is a party, the Company shall not permit
any securities other than the Registrable Shares to be included in the Initial
Shelf Registration or any Subsequent Shelf Registration (as defined below). The
Company shall use its best efforts to cause the Initial Shelf Registration to be
declared effective under the Securities Act on or prior to
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the Effectiveness Date and to keep the Initial Shelf Registration continuously
effective under the Securities Act until two years from the Issue Date (the
"EFFECTIVENESS PERIOD"), or such shorter period ending when (i) all Registrable
Shares covered by the Initial Shelf Registration have been sold in the manner
set forth and as contemplated in the Initial Shelf Registration or (ii) a
Subsequent Shelf Registration covering all of the Registrable Shares has been
declared effective under the Securities Act.
(b) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf Registration or
any Subsequent Shelf Registration ceases to be effective for any reason at any
time during the Effectiveness Period (other than because of the sale of all of
the securities registered thereunder), the Company shall use its best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within 45 days of such cessation of effectiveness amend
the Shelf Registration in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Shares (a "SUBSEQUENT SHELF REGISTRATION"). In the event that the Company
becomes eligible to use any form other than S-1 for a Subsequent Shelf
Registration, if permitted under applicable law, the Company shall be entitled
to cause a Subsequent Shelf Registration to be substituted for the Initial Shelf
Registration. If a Subsequent Shelf Registration is filed, the Company shall use
its best efforts to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Initial
Shelf Registration or any Subsequent Shelf Registration was previously
continuously effective. As used herein the term "SHELF REGISTRATION" means the
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly supplement and
amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if requested by the Holders
of a majority in aggregate liquidation value of the Registrable Shares covered
by such Registration Statement or by any underwriters) of such Registrable
Shares.
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4. Additional Dividends
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(a) The Company and the Initial Purchasers agree that the Holders of
Registrable Shares will suffer damages if the Company fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, in
lieu of any other damages that might be obtainable, the Company agrees to pay
additional dividends on the Preferred Shares ("ADDITIONAL DIVIDENDS") under the
circumstances set forth below:
(i) if the Exchange Offer Registration Statement has not been filed on
or prior to the Filing Date or the Initial Shelf Registration has not been
filed within 30 days following the delivery of a Shelf Notice prior to the
filing date;
(ii) if the Exchange Offer Registration Statement or the Initial Shelf
Registration has not been declared effective on or prior to the
Effectiveness Date; and
(iii) if either (A) if applicable, the Company has not exchanged the
Exchange Shares for all Preferred Shares validly tendered in accordance
with the terms of the Exchange Offer on or prior to 195 days after the
Issue Date or (B) if applicable, the Exchange Offer Registration Statement
ceases to be effective at any time prior to the time that the Exchange
Offer is consummated or (C) if applicable, the Shelf Registration Statement
has been declared effective and such Shelf Registration Statement ceases to
be effective at any time prior to the earlier of the date on which all
Registrable Shares covered by the Shelf Registration have been sold in the
manner set forth and as contemplated in the Shelf Registration on the
second anniversary of the Issue Date;
(each such event referred to in clauses W through (iii) above is a "REGISTRATION
DEFAULT"), the sole remedy available to holders of the Preferred Shares will be
the immediate accrual of Additional Dividends as follows: the per annum dividend
rate on the Preferred Shares will increase by 0.5% upon the occurrence of the
first Registration Default; and the per annum dividend rate will increase by an
additional 0.25% for each subsequent 90-day period during which any Registration
Default remains uncured, up to a maximum additional dividend rate of 2.00% per
annum for all Registration Defaults, PROVIDED, HOWEVER, that (1) upon the filing
of the Exchange Registration Statement or the Initial Shelf Registration (in the
case of (i) above), (2) upon the effectiveness of the Exchange Registration
Statement or a Shelf Registration (in the case of
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(ii) above) or (3) upon the exchange of Exchange Shares for all Preferred Shares
tendered (in the case of (iii)(A) above), or upon the effectiveness of the
Exchange Registration Statement which had ceased to remain effective (in the
case of (iii)(B) above), or upon the effectiveness of the Shelf Registration
which had ceased to remain effective (in the case of (iii)(C) above), any
Additional Dividends on the Preferred Shares as a result of such clause (i),
(ii) or (iii) (or the relevant subclause thereof), as the case may be, shall
cease to accrue and the dividend rate on the Preferred Shares will revert to the
dividend rate originally borne by the Preferred Shares.
(b) The Company shall notify the Holders within three business days after
each and every date on which an event occurs in respect of which any Additional
Dividend is required to be paid (an "EVENT DATE"). Any amounts of Additional
Dividends due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable in cash or in additional Preferred Shares as contemplated by the
Restated Articles semiannually on each February 1 and August 4 to the Holders of
record on the January 15 and July 15 immediately preceding such dates),
commencing with the first such date occurring after any such Additional Dividend
commences to accrue. The amount of an Additional Dividend will be determined by
multiplying the applicable Additional Dividend rate by the principal amount of
the Registrable Shares, multiplied by a fraction, the numerator of which is the
number of days such Additional Dividend rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
5. Registration Procedures
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In connection with the registration of any Registrable Shares or Private
Exchange Shares pursuant to Section 2 or 3 hereof, the Company shall effect such
registrations to permit the sale of such Registrable Shares or Private Exchange
Shares in accordance with the intended method or methods of disposition thereof,
and pursuant thereto the Company shall:
(a) Prepare and file with the SEC, prior to the Filing Date, a
Registration Statement or Registration Statements as prescribed by Section
2 or 3, and to use its best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein,
PROVIDED that, if (1) such filing is pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-
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Dealer who seeks to sell Exchange Shares during the Applicable Period,
before filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall, if requested by any Holder of
Registrable Securities, furnish to and afford the Holders of the
Registrable Shares and each such Participating Broker-Dealer, as the case
may be, covered by such Registration Statement, their counsel and the
managing underwriter(s), if any, a reasonable opportunity to review copies
of all such documents (including copies of any documents to be incorporated
by reference therein and all exhibits thereto) proposed to be filed (at
least 5 business days prior to such filing). The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be afforded an opportunity to
review prior to the filing of such document, if the Holders of a majority
in aggregate liquidation value of the Registrable Shares covered by such
Registration Statement, or such Participating Broker-Dealer, as the case
may be, their counsel, or the managing underwriter(s), if any, shall
reasonably object; PROVIDED, HOWEVER, during any delay in meeting the time
frames contemplated in Section 4 hereof as a result of the actions of any
Holder of Registrable Shares, no Additional Dividends shall accrue or be
payable to such Holder.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement,
as the case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented
by any Prospectus supplement required by applicable law, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) 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 them with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus; the Company shall be deemed
not to have used its best efforts to keep a Registration Statement
effective during the Applicable Period if it voluntarily takes any action
that would result in selling Holders of the Registrable Shares covered
thereby or Participating Broker-Dealers seeking to sell Exchange Shares not
being able to sell such Registrable Shares or such Exchange
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Shares during that period unless such action is required by applicable law
or unless the Company complies with this Agreement, including without
limitation, the provisions of clause 5(c)(v) below.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, notify the selling Holders of Registrable Shares, or
each such Participating Broker-Dealer, as the case may be, their counsel
and the managing underwriters), if any, promptly (but in any event within
two business days), and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment thereto
has been filed, and, with respect to a Registration Statement or any
post-effective amendment thereto, when the same has become effective
(including in such notice a written statement that any Holder may, upon
request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment thereto including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits), (ii) of the issuance by the SEC of
any stop order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of any preliminary prospectus
or the initiation of any proceedings for that purpose, (iii) if at any time
when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Shares the representations and
warranties of the Company contained in any agreement (including any
underwriting agreement) contemplated by Section 5(n) below cease to be true
and correct, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Shares
or the Exchange Shares to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose, (v) of the happening of any event or any
information becoming known to the Company that makes any statement made in
such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in, or
amendments or supplements to, such Registration Statement, Prospectus or
documents so that, in the case of the
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Registration Statement, 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 not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (vi) of
the Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, use its best efforts to prevent the issuance of any
order suspending the effectiveness of a 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
Shares or the Exchange Shares to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is
issued, to use its best efforts to obtain the withdrawal of any such order
at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter(s), if any, or the Holders of a
majority in aggregate liquidation value of the Registrable Shares being
sold in connection with an underwritten offering, (i) promptly incorporate
in a Prospectus supplement or post-effective amendment thereto such
information as the managing underwriters), if any, or such Holders or
counsel reasonably request to be included therein, (ii) make all required
filings of such Prospectus supplement or such post-effective amendment
thereto as soon as practicable after the Company has received notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment thereto and (iii), if applicable, supplement or
make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, furnish
17
-15-
to each selling Holder of Registrable Shares and to each such Participating
Broker-Dealer who so requests and to counsel and the managing
underwriters), if any, without charge, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein
by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, deliver to each selling Holder of Registrable Shares, or
each such Participating Broker-Dealer, as the case may be, their counsel,
and the managing underwriter or underwriters, if any, without charge, as
many copies of the Prospectus or Prospectuses (including each form of
preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Shares or
each such Participating Broker-Dealer, as the case may be, and the managing
underwriter or underwriters or agents, if any, and dealers (if any), in
connection with the offering and sale of the Registrable Shares covered by
or the sale by Participating Broker-Dealers of the Exchange Shares pursuant
to such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Shares or any delivery
of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, to use its best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Shares or each such
Participating Broker-Dealer, as the case may be, the managing 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 Shares for offer and sale under the
state securities or "blue sky" laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the managing
underwriter or
18
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underwriters, if any, reasonably request in writing, PROVIDED that where
Exchange Shares held by Participating Broker-Dealers or Registrable Shares
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 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Shares held by Participating Broker-Dealers
or the Registrable Shares covered by the applicable Registration Statement;
PROVIDED that the Company shall 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) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3, cooperate
with the selling Holders of Registrable Shares and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Shares to be sold, which
certificates shall not bear any restrictive legends and, if requested by
the selling Holders, shall be in a form eligible for deposit with The
Depository Trust Company; and enable such Registrable Shares to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request and are consistent
with the terms of the Restated Articles under which the Registrable Shares
are issued.
(j) Use its best efforts to cause the Registrable Shares covered by
the Registration Statement to be registered with or approved by such other
United States governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the managing underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Shares, except as may be required solely as a consequence of the nature of
such selling Holder's business, in which case the Company will cooperate in
all reasonable respects with the filing of such Registration Statement and
the granting of such approvals at such seller's cost and expense.
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(k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) above, as promptly as reasonably practicable
prepare and (subject to Section 5(a) above) file with the SEC, at the
expense of the Company, 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, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Shares being sold thereunder or to the
purchasers of the Exchange Shares to whom such Prospectus will be delivered
by a Participating Broker-Dealer, any 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) Use its best efforts to cause the Registrable Shares covered by a
Registration Statement or the Exchange Shares sold by a Participating
Broker-Dealer during the Applicable Period, as the case may be, to the
rated with the appropriate rating agencies, if so requested by the Holders
of a majority in aggregate principal amount of Registrable Shares covered
by such Registration Statement or the managing underwriter or underwriters,
if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Shares, (i) provide the Holders with printed
certificates for the Registrable Shares in a form eligible for deposit with
The Depository Trust Company if the Holders so request and (ii) provide a
CUSIP number for the Registrable Shares.
(n) In connection with an underwritten offering of Registrable Shares
pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of preferred equity securities
similar to the Preferred Shares and take all such other actions as are
reasonably requested by the managing underwriter(s), if any, in order to
expedite or facilitate the registration or the disposition of such
Registrable Shares and, in such connection, (i) make such reasonable
representations and
20
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warranties to the managing underwriter or underwriters on behalf of any
underwriters, with respect to the business of the Company and its
subsidiaries and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings of preferred equity securities, and confirm the same
if and when requested; (ii) obtain opinions of counsel to the Company and
updates thereof in form and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the managing underwriter
or underwriters covering the matters customarily covered in opinions
requested in underwritten offerings of preferred equity securities and such
other matters as may be reasonably requested by underwriters; (iii) obtain
"cold comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters from the
independent certified public accountants 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 the managing underwriter or
underwriters on behalf of any 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 of preferred equity
securities and such other matters as reasonably requested by the managing
underwriter or underwriters; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof (or
such other provisions and procedures acceptable to Holders of a majority in
aggregate liquidation value of Registrable Shares covered by such
Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, make available for inspection by any selling Holder of
such Registrable Shares being sold, or each such Participating
Broker-Dealer, as the
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case may be, the managing underwriter or underwriters participating in any
such disposition of Registrable Shares who held at least 5.0% of the
outstanding Registrable Shares, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be (collectively, the "INSPECTORS"), at the
offices where normally kept, during reasonable business hours, subject to
customary confidentiality undertakings, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries (collectively, the "RECORDS") as shall be reasonably necessary
to enable them to exercise any applicable due diligence responsibilities,
and cause the officers, directors and employees of the Company and its
subsidiaries to supply all information in each case reasonably requested by
any such Inspector in connection with such Registration Statement. Records
which the Company determines, in good faith, to be confidential and any
Records which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a material misstatement or material omission
in such Registration Statement and the Company fails to promptly correct
such material misstatement or omission after notice thereof, (ii) the
release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or (iii) the information in such
Records has been made generally available to the public. Each selling
Holder of such Registrable Shares and each such Participating Broker-Dealer
or underwriter will be required to agree that information obtained by it as
a result of such inspections shall be deemed confidential and shall not be
used by it for any purpose other than discharging due diligence
responsibilities. Each selling Holder of such Registrable Shares and each
such Participating Broker-Dealer will be required to further agree that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company to
undertake appropriate action to prevent disclosure of the Records deemed
confidential at its expense.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at
22
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the end of any fiscal quarter in which Registrable Shares are sold to
underwriters in a firm commitment or best efforts underwritten offering and
(ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the effective
date of a Registration Statement, which statements shall cover said
12-month periods.
(q) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company in a form customary for
underwritten offerings of preferred equity securities similar to the
Preferred Shares, addressed to the Holders of Registrable Shares
participating in the Exchange Offer or the Private Exchange, as the case
may be, and which includes an opinion that the Company has duly issued the
Exchange Shares and the Private Exchange Shares, as the case may be.
(r) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Shares by Holders to the Company (or to
such other Person as directed by the Company) in exchange for the Exchange
Shares or the Private Exchange Shares, as the case may be, the Company
shall ▇▇▇▇, or cause to be marked, on such Registrable Shares that such
Registrable Shares are being cancelled in exchange for the Exchange Shares
or the Private Exchange Shares, as the case may be; in no event shall such
Registrable Shares be marked as paid or otherwise satisfied.
(s) Cooperate with each seller of Registrable Shares covered by any
Registration Statement and the managing underwriters), if any,
participating in the disposition of such Registrable Shares and their
respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD").
(t) Use its reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Shares covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Registrable Shares or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Shares or Exchange Shares
to be sold by such Participating Broker-Dealer, as the case may be, as the
Company may, from time to time,
23
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reasonably request. The Company may exclude from such registration the
Registrable Shares of any seller or Participating Broker-Dealer who fails to
furnish such information within a reasonable time after receiving such request,
and during any delay in meeting the time frames contemplated by Section 4 hereof
as a result of a delay in receiving any such information, no Additional Interest
shall accrue or be payable.
Each Holder of Registrable Shares and each Participating Broker-Dealer
agrees by acquisition of such Registrable Shares or Exchange Shares to be sold
by such Participating Broker-Dealer, as the case may be, that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi), such Holder will forthwith
discontinue disposition of such Registrable Shares covered by such Registration
Statement or Prospectus or Exchange Shares to be sold by such Holder or
Participating Broker-Dealer, as the case may be, until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
5(k), 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. In the event the Company shall give any such
notice, each of the Effectiveness Period and the Applicable Period 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 Shares covered by such Registration Statement or Exchange Shares to
be sold by such Holder or Participating Broker-Dealer, as the case may be, shall
have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) or (y) the Advice.
6. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company, whether or not
the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with one underwritten offering and (B) fees and expenses
of compliance with state securities or "blue sky" laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with
"blue sky" qualifications of the Registrable Shares or Exchange Shares and
determination of the eligibility of the Registrable Shares or Exchange Shares
for investment under the laws of such jurisdictions (x) where the holders of
Registrable Shares are located, in the case of the Exchange
24
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Shares, or (y) as provided in Section 5(h), in the case of Registrable Shares or
Exchange Shares to be sold by a Participating Broker-Dealer during the
Applicable Period)), such expenses, together with expenses in connection with
any related filing, not to exceed $10,000 in the aggregate, (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Shares or Exchange Shares in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is reasonably requested by the managing underwriter or
underwriters, if any, or, in respect of Registrable Shares or Exchange Shares to
be sold by any Participating Broker-Dealer during the Applicable Period, by the
Holders of a majority in aggregate liquidation value of the Registrable Shares
included in any Registration Statement or of such Exchange Shares, as the case
may be), (iii) reasonable messenger, telephone and delivery expenses, (iv) fees
and disbursements of counsel for the Company and reasonable fees and
disbursements of one special counsel for the sellers of Registrable Shares under
the Shelf Registration (subject to the provisions of Section 6(b)), (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) rating agency fees, (vii) Securities Act liability insurance, if the
Company desires such insurance, (viii) fees and expenses of all other Persons
retained by the Company, (ix) internal expenses of the Company (including,
without limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties), (x) the expense of any annual or
special audit, (xi) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange, (xii) the
reasonable fees and disbursements of underwriters, if any, customarily paid by
issuers or sellers of securities, and (xiii) the expenses incurred by the
Company relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements and any other
documents necessary in order to comply with this Agreement.
(b) In connection with any Shelf Registration hereunder, the Company
shall reimburse the Holders of the Registrable Shares being registered in such
registration for the actual reasonable fees and disbursements of not more than
one counsel (in addition to appropriate local counsel) chosen by the Holders of
a majority in aggregate liquidation value of the Registrable Shares to be
included in such Registration Statement and other reasonable out-of-pocket
expenses of the Holders of Registrable Shares incurred in connection with the
registration of the Registrable Shares, subject to a maximum of $25,000.
Notwithstanding anything to the contrary contained herein, the Company shall not
have
25
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any obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Shares.
7. Indemnification
---------------
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Shares and each Participating Broker-Dealer selling Exchange Shares
during the Applicable Period, the officers and directors of each such person,
and each person, if any, who controls any such person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act (each,
a "Participant"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and other
expenses actually incurred 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 Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by, arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Participant furnished to the Company in writing by such
Participant expressly for use therein; PROVIDED that the foregoing indemnity
with respect to any preliminary prospectus shall not inure to the benefit of any
Participant (or to the benefit of any person controlling such Participant) from
whom the person asserting any such losses, claims, damages or liabilities
purchased Registrable Shares or Exchange Shares if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the related Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and a copy of the related Prospectus (as so amended or supplemented)
shall have been furnished to such Participant at or prior to the sale of such
Registrable or Exchange Shares, as the case may be, to such person or at a time
the Company had notified persons under the last paragraph of Section 5 hereof to
cease using such Registration Statement or Prospectus.
(b) Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors and officers
and each person who controls the Company within the meaning of
26
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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 each Participant, but only
with reference to information relating to such Participant furnished to the
Company in writing by such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph (b) shall in
no event exceed the proceeds received by such Participant from sales of
Registrable Shares giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) of this Section 7, such person (the "INDEMNIFIED PERSON")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PERSON") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain one counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding. In any such proceeding, any Indemnified Person 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 Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed in writing to the
contrary, (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representations of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate law firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for the Participants and such control
persons of Participants shall be designated in writing by Participants who sold
a majority in interest of Registrable Shares sold by all such Participants and
any such separate firm for the Company, its directors, officers and such control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final
27
-25-
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for reasonable fees and expenses actually incurred by
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement; PROVIDED, HOWEVER, that the Indemnifying Person shall not be liable
for any settlement effected without its consent pursuant to this sentence if the
Indemnifying Party is contesting, in good faith, the request for reimbursement.
No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in paragraphs (a) and (b) of this
Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraphs, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Participants on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and the Participants on the other 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 Participants and the
parties, relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The parties shall agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by PRO RATA allocation
(even if the Participants were treated as one entity for such
28
-26-
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Shares or
Exchange Shares exceeds the amount of any damages that such Participant has
otherwise been required to pay 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 indemnity and contribution agreements contained in this Section 7
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
------------------
The Company covenants that it will file the reports required to he filed
by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any time
the Company is not required to file such reports, it will, upon the request of
any Holder of Registrable Shares, make publicly available other information of a
like nature so long as necessary to permit sales pursuant to Rule 144 or Rule
144A under the Securities Act. The Company further covenants that so long as any
Registrable Shares remain outstanding to make available to any Holder of
Registrable Shares in connection with any sale thereof, the information required
by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Shares pursuant to (a) such Rule 144A, or (b) any similar rule or
regulation hereafter adopted by the SEC unless at such time the Registrable
Shares are fully salable under Rule 144 or any successor provision.
9. Underwritten Registrations
--------------------------
If any of the Registrable Shares covered by any Shelf Registration are to
be sold in an underwritten offering, the investment banker or
29
-27-
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering and shall be reasonably
acceptable to the Company.
No Holder of Registrable Shares may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Shares on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
-------------
(a) REMEDIES. In the event of a breach by the Company of any of its
obligations under this Agreement, other than the occurrence of an event which
requires payment of Additional Dividends, each Holder of Registrable Shares, in
addition to being entitled to exercise all rights provided herein or, in the
case of the Initial Purchasers, in the Purchase Agreement or granted by law,
including recovery of damages, will be entitled to a specific performance of its
rights under this Agreement. In the event of a breach by the Company of any of
its obligations under this Agreement, other than the occurrence of an event
which requires payment of Additional Dividends, 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 and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. Except for the old Warrant Agreement (as
defined in the Purchase Agreement), the Company has not, as of the date hereof,
and the Company shall not, after the date of this Agreement, enter into any
agreement with respect to any of its securities that is inconsistent in all
material respects with the rights granted to the Holders of Registrable Shares
in this Agreement or otherwise conflicts with the provisions hereof in all
material respects. Except for the Old Warrant Agreement (as defined in the
Purchase Agreement), the Company has not entered and will not enter into any
agreement with respect to any of its securities which will grant to any Person
piggyback rights with respect to a Registration Statement.
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(c) ADJUSTMENTS AFFECTING REGISTRABLE SHARES. The Company shall not,
directly or indirectly, take any action with respect to the Registrable Shares
as a class that would adversely affect, in any material respect, the ability of
the Holders of Registrable Shares to include such Registrable Shares in a
registration undertaken pursuant to this Agreement.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of at
least a majority of the then outstanding aggregate liquidation value of
Registrable Shares. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders of Registrable Shares 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
Shares may be given by Holders of at least a majority in aggregate liquidation
value of the Registrable Shares being sold by such Holders pursuant to such
Registration Statement, PROVIDED that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall he made in writing by hand-delivery, registered
first-class mail, next day air courier or telecopier:
(i) if to a Holder of Registrable Shares, CIBC Wood Gundy
Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.; and
(ii) if to the Company, High Voltage Engineering Corporation, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
President, Tel: (▇▇▇) ▇▇▇-▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Esq., Tel: (▇▇▇) ▇▇▇-▇▇▇▇, Fax:
(▇▇▇) ▇▇▇-▇▇▇▇.
All such notices and communications shall he deemed to have been duly
given: (i) when delivered by hand, if personally delivered; (ii) five business
days after being deposited in the mail, postage prepaid, if mailed; (iii) one
business day after being timely delivered to a next-day
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air courier; and (iv) when receipt is acknowledged by the addressee, if
telecopied.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Registrable Shares.
(g) 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.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) 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 impaired
or invalidated, and the parties hereto shall use commercially reasonable 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.
(i) ENTIRE AGREEMENT. This Agreement, together with the Purchase
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.
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(l) SHARES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the consent or
approval of Holders of a specified percentage of Registrable Shares is required
hereunder, Registrable Shares held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
IN WITNESS WHEREOF, the parties have executed this Preferred Stock
Registration Rights Agreement as of the date first written above.
HIGH VOLTAGE ENGINEERING
CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ Press
------------------------------------
Name: ▇▇▇▇▇▇▇▇ Press
Title: President
CIBC WOOD GUNDY SECURITIES CORP.
PAINEWEBBER INCORPORATED
By: CIBC WOOD GUNDY SECURITIES
CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name:
Title: