EXHIBIT 7
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ALLIED DIGITAL TECHNOLOGIES CORP.
REGISTRATION RIGHTS AGREEMENT
by and among
Allied Digital Technologies Corp.
and
Its Stockholders
dated as of
September 24, 1998
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Registration Rights Agreement
TABLE OF CONTENTS
Page
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RECITALS ................................................................................1
ARTICLE I
DEFINITIONS.....................................................................1
1.1 Defined Terms in the Investors' Agreement..............................1
1.2 Definitions............................................................1
ARTICLE II
DEMAND REGISTRATIONS............................................................3
2.1 Requests for Registration..............................................3
2.2 Long-Form Registrations................................................4
2.3 Short-Form Registrations...............................................4
2.4 Effective Registration Statement.......................................4
2.5 Priority on Demand Registrations.......................................5
2.6 Selection of Underwriters..............................................7
2.7 Black-Out Rights and Postponement......................................7
ARTICLE III
PIGGYBACK REGISTRATIONS.........................................................7
3.1 Right to Piggyback.....................................................7
3.2 Piggyback Expenses.....................................................8
3.3 Priority on Primary Registrations......................................8
3.4 Priority on Secondary Registrations....................................8
ARTICLE IV...............................................................................9
HOLDBACK AGREEMENTS.............................................................9
4.1 Holdback...............................................................9
4.2 Company Holdback.......................................................9
ARTICLE V...............................................................................10
REGISTRATION PROCEDURES........................................................10
ARTICLE VI..............................................................................14
REGISTRATION EXPENSES..........................................................14
6.1 Fees Generally........................................................14
6.2 Counsel Fees..........................................................15
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Registration Rights Agreement
ARTICLE VII.............................................................................15
UNDERWRITTEN OFFERINGS.........................................................15
7.1 Demand Underwritten Offerings.........................................15
7.2 Incidental Underwritten Offerings.....................................16
ARTICLE VIII............................................................................16
INDEMNIFICATION................................................................16
8.1 Indemnification by the Company........................................16
8.2 Indemnification by a Selling Stockholder..............................18
8.3 Indemnification Procedure.............................................18
8.4 Underwriting Agreement................................................19
8.5 Contribution..........................................................20
8.6 Periodic Payments.....................................................21
ARTICLE IX..............................................................................21
RULE 144 ......................................................................21
ARTICLE X...............................................................................21
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS....................................21
ARTICLE XI..............................................................................22
MISCELLANEOUS..................................................................22
11.1 No Inconsistent Agreements............................................22
11.2 Adjustments Affecting Registrable Securities..........................22
11.3 Specific Performance..................................................22
11.4 Actions Taken; Amendments and Waivers.................................22
11.5 Successors and Assigns................................................23
11.6 Notices...............................................................23
11.7 Headings; Certain Conventions.........................................24
11.8 Gender................................................................24
11.9 Invalid Provisions....................................................25
11.10 Governing Law.........................................................25
11.11 Consent to Jurisdiction and Service of Process........................25
11.12 Waiver of Jury Trial..................................................26
11.13 Counterparts..........................................................26
Exhibit A-1 -- Form of Registration Rights Joinder Agreement for Permitted Transferees
Exhibit A-2 -- Form of Registration Rights Joinder Agreement for Additional Stockholders
Exhibit A-3 -- Form of Registration Rights Joinder Agreement for Transferees under
Section 2.4 of the Investors' Agreement
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Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of September
24, 1998, among Allied Digital Technologies Corp., a Delaware corporation (the
"Company"), 399 Venture Partners, Inc., a Delaware corporation ("399"), Citicorp
Mezzanine Partners, L.P. ("CMP"), a Delaware limited partnership, Fleet
Corporate Finance, Inc. ("FCF"), a Massachusetts corporation, and each
individual whose name appears on the signature pages hereto under the heading
"Management Member" (individually, a "Management Member" and collectively, the
"Management Members") and any other Person who executes a Joinder Agreement and
thereby becomes a party to this Agreement. Certain capitalized terms used herein
are defined in Article I hereto.
RECITALS
WHEREAS, the Company and Analog Acquisition Corp. ("AAC") have entered
into that certain Agreement and Plan of Merger, dated May 5, 1998 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Merger Agreement"), pursuant to which, among other things, AAC is being merged
with and into the Company with the Company continuing as the surviving
corporation;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Investors'
Agreement among the parties hereto and dated the date hereof (as the same may be
amended, supplemented or otherwise modified from time to time, the "Investors'
Agreement").
NOW, THEREFORE, in connection with the Merger Agreement, the Investors'
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms in the Investors' Agreement. Unless otherwise defined
herein, capitalized terms used in this Agreement shall have the respective
meanings assigned to them in the Investors' Agreement.
1.2 Definitions.
The following defined terms, when used in this Agreement, shall have
the respective meanings set forth below (such definitions to be equally
applicable to both singular and plural forms of the terms defined):
"Additional Stockholder" has the meaning assigned to such term in the
Investors' Agreement, but only to the extent that (a) the Company has granted
the relevant Person registration rights as a Stockholder hereunder and (b) such
Person has executed a Registration Rights Joinder Agreement.
Registration Rights Agreement
"Black-Out Notice" has the meaning assigned to it in Section 2.7(b).
"Commission" means Securities and Exchange Commission.
"Demand Registration" means (a) any Qualifying Offering requested in
accordance with Section 2.1(a), (b) any Long-Form Registration, Short-Form
Registration or 415 Registration requested in accordance with Section 2.1(b).
"Demand Registration Request" has the meaning assigned to it in Section
2.1(b).
"415 Registration" has the meaning assigned to it in Section 2.1(b).
"Initial Public Offering" or "IPO" means the first time a registration
statement filed under the Securities Act with the Commission respecting an
offering, whether primary or secondary, of Common Stock (or securities
convertible, exercisable or exchangeable for or into Common Stock or rights to
acquire Common Stock or such securities), which is underwritten on a firmly
committed basis, is declared effective and the securities so registered are
issued and sold.
"Long-Form Registration" has the meaning assigned to it in Section
2.1(b).
"Merger Agreement" has the meaning assigned to it in the recitals
hereto.
"Piggyback Holders" has the meaning assigned to it in Section 3.1.
"Piggyback Registration" has the meaning assigned to it in Section 3.l.
"Registration Expenses" has the meaning assigned to it in Section 6.l.
"Registrable Securities" means, at any time, (a) the shares of Common
Stock then issued and outstanding or which are issuable upon the conversion,
exercise or exchange of any Equity Equivalents or capital stock (b) any then
outstanding securities into which shares of Common Stock shall have been changed
and (c) any then outstanding securities resulting from any reclassification or
recapitalization of Common Stock; provided, however, that "Registrable
Securities" shall not include any shares of Common Stock or other securities
obtained or transferred pursuant to an effective registration statement under
the Securities Act or in a Rule 144 Transaction; and provided further, however,
that "Registrable Securities" shall not include any shares of Common Stock or
other securities which are held by a Person who is not a Stockholder.
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Registration Rights Agreement
"Registration Rights Joinder Agreement" means a Registration Rights
Joinder Agreement in the form attached hereto as Exhibits A-1 to A-3.
"Required 399 Stockholders" means, as of the date of any determination
thereof, 399 Stockholders which then hold Registrable Securities representing at
least a majority (by number of shares) of the Registrable Securities, on a
Diluted Basis, then held by all 399 Stockholders.
"Required CMP Stockholders" means, as of the date of any determination
thereof, CMP Stockholders which then hold Registrable Securities representing at
least a majority (by number of shares) of the Registrable Securities, on a
Diluted Basis, then held by all CMP Stockholders.
"Short-Form Registration" has the meaning assigned to it in Section
2.1(b).
"Takedown" has the meaning assigned to it in Section 2.8.
ARTICLE II
DEMAND REGISTRATIONS
2.1 Requests for Registration.
(a) If the Company has not theretofore effected an Initial Public
Offering, then, at any time from and after the date hereof the Required 399
Stockholders shall have the right to require that the Company effect a
Qualifying Offering by delivery of a written request therefor to the Company.
Such a request shall specify the number of Registrable Securities proposed to
be sold by the Required 399 Stockholders. The Company shall use its best
efforts to effect the Qualifying Offering within 120 days after its receipt
of such request. Within 10 days after its receipt of such request, the
Company will give written notice of such request to all other holders of
Registrable Securities. Subject to the provisions of Section 2.5, the Company
will use all reasonable efforts to include in the Qualifying Offering (i) all
Registrable Securities which the Required 399 Stockholders have requested to
be included therein and (ii) all other Registrable Securities which the
Stockholders have requested in writing, within 20 days after receipt of the
Company's notice, to be included therein. The Company will pay all
Registration Expenses in connection with a Qualifying Offering requested in
accordance with this Section.
(b) Subject to Sections 2.2, 2.3 and 2.7, at any time from and after the
date which is 120 days after the closing of an Initial Public Offering, the
Required 399 Stockholders shall have the right to require the Company to file
a registration statement (a "Demand Registration") under the Securities Act
of all or part of their Registrable Securities (i) on Form S-1 or S-2 or any
similar
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long-form registration statement (any such registration, a "Long-Form
Registration"), or (ii) on Form S-3 or any similar short-form registration
statement (any such registration, a "Short-Form Registration"), if the
Company qualifies to use such short form, or (iii) on any applicable form
pursuant to Rule 415 of the Securities Act (a "415 Registration") by delivery
of a written request therefor to the Company (a "Demand Registration
Request"). Subject to Sections 2.2 and 2.3, at any time from and after the
earlier of (x) the fifth anniversary of the date hereof and (y) the date
which is 120 days after the closing of an Initial Public Offering, the
Required CMP Stockholders shall have the right to require the Company to file
(i) one Long-Form Registration and (ii) Short-Form Registrations, if the
Company qualifies to use such short form; provided, that, for purposes of the
rights afforded under this sentence, Required CMP Stockholders shall not be
deemed to include FCF and its Permitted Transferees. Each request for a
Demand Registration shall specify the number of Registrable Securities
proposed to be sold by the Required 399 Stockholders or the Required CMP
Stockholders, as the case may be, and shall specify the intended method of
disposition thereof. Within 10 days after its receipt of any such request,
the Company will give written notice of such request to all other holders of
Registrable Securities. Subject to the provisions of Section 2.5, the Company
will use its best efforts to effect the registration under the Securities Act
on the form requested by the Required 399 Stockholders or the Required CMP
Stockholders, as the case may be, and to include in such registration, (i)
all Registrable Securities which the Required 399 Stockholders or the
Required CMP Stockholders, as the case may be, have so requested to be
included therein and (ii) all other Registrable Securities which the
Stockholders have requested in writing, within 30 days after receipt of the
Company's notice, to be included therein.
(c) If the Required 399 Stockholders request a Demand Registration
pursuant to Section 2.1(a) or 2.1(b) or if the Required CMP Stockholders
request a Demand Registration pursuant to Section 2.1(b), they may, at any
time prior to the effective date of the registration statement relating to
such Demand Registration, revoke such request by providing written notice to
the Company.
(d) The Company shall, as expeditiously as possible following a Demand
Registration Request, use its best efforts to (i) effect such registration
under the Securities Act of the Registrable Securities which the Company has
been so requested to register, for distribution in accordance with the
intended method of distribution, and (ii) if requested by the Required 399
Stockholders, obtain acceleration of the effective date of the registration
statement relating to such registration.
2.2 Long-Form Registrations. In addition to their right to request a
Qualifying Offering, the Required 399 Stockholders will be entitled to request
up to three Long-Form Registrations pursuant to Section 2.1(b). The Company will
pay all Registration Expenses in connection with any such Long-Form
Registration. All Long-Form Registrations (unless otherwise
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requested by the Required 399 Stockholders or the Required CMP Stockholders, as
the case may be) shall be underwritten registrations.
2.3 Short-Form Registrations. In addition to their right to request
Long-Form Registrations, the Required 399 Stockholders and the Required CMP
Stockholders will be entitled to request an unlimited number of Short-Form
Registrations. The Company will pay all Registration Expenses in connection with
any such Short-Form Registration. Demand Registrations will be Short-Form
Registrations whenever the Company is qualified to use Form S-3 or any similar
short-form registration statement. Once the Company has become subject to the
reporting requirements of the Exchange Act, the Company will use its reasonable
best efforts to make Short-Form Registrations available for the sale of
Registrable Securities.
2.4 Effective Registration Statement. No Demand Registration shall be
deemed to have been requested or effected for purposes of Sections 2.1(a) and
2.2:
(a) unless a registration statement with respect thereto has become
effective;
(b) if, after it has become effective, any stop order, injunction or other
order or requirement of the Commission or any other governmental agency
or court for any reason, affecting any of the Registrable Securities
covered by such registration statement, is threatened in writing or
issued by the Commission or other governmental agency or court;
(c) if the Company declines to effect such Demand Registration pursuant to
Section 2.7(a) or delivers a Black-Out Notice with respect to such
requested Demand Registration;
(d) if the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such requested
Demand Registration are not satisfied by reason of a failure by or
inability of the Company to satisfy any of such conditions, or the
occurrence of an event outside the reasonable control of the Required
399 Stockholders or Required CMP Stockholders, as the case may be;
(e) if the Required 399 Stockholders or Required CMP Stockholders, as the
case may be, have delivered to the
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Company the revocation notice contemplated by Section 2.1(c); or
(f) other than in the case of a Qualifying Offering, if the Required 399
Stockholders or Required CMP Stockholders, as the case may be, are not
able to register and sell at least 70% of the amount of Registrable
Securities requested to be included in the Demand Registration;
provided, that the Company will pay all Registration Expenses in connection with
any Demand Registration if pursuant to this Section 2.4 the registration is
deemed not to have been requested or effected.
2.5 Priority on Demand Registrations.
(a) Without the written consent of the Required 399 Stockholders, the
Company (i) will not include in any Long-Form Registrations, Short-Form
Registrations and 415 Registrations requested pursuant to Section 2.1(b), any
securities which are not Registrable Securities and (ii) will not include in
any Qualifying Offering any securities, other than Registrable Securities or
shares of Common Stock to be sold by the Company.
(b) If the Required 399 Stockholders and other Stockholders request
Registrable Securities to be included in a Demand Registration which is an
underwritten offering and the managing underwriter advises the Company in
writing that in its opinion the number of Registrable Securities requested to
be included exceeds the number of Registrable Securities which can be sold in
such offering within a price range acceptable to the Required 399
Stockholders or the Required CMP Stockholders, as the case may be, the
Company will include any securities to be sold in such Demand Registration in
the following order:
(i) in the case of a Qualifying Offering, (x) first, subject to
Section 2.5(a), the securities the Company proposes to sell; (y)
second, the Registrable Securities requested to be included in
such registration by the Stockholders, provided, that if the
managing underwriter determines in good faith that a lower number
of Registrable Securities requested to be included by the
Stockholders should be included, then only that lower number of
Registrable Securities requested to be included by the
Stockholders shall be included in such registration, and the
Stockholders shall participate in the registration on a pro rata
basis in accordance with the number of Registrable Securities
requested to be included in such registration by each such
Stockholder, provided, further, that if the managing underwriter
determines in good faith that a lower number of Registrable
Securities held by Management Stockholders and
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Additional Management Stockholders than such pro rata portion
should be included, then such lower number shall be included and,
as a result thereof, a greater number of Registrable Securities
owned by the other Stockholders may be sold; and (z) third, any
securities other than Registrable Securities to be sold by persons
other than the Company included pursuant to Section 2.5(a) hereof.
(ii) in the case of any Demand Registration other than a Qualifying
Offering, (w) first, the Registrable Securities owned by the
Stockholders and (x) second, any securities other than Registrable
Securities to be sold by persons other than the Company included
pursuant to Section 2.5(a) hereof, provided, that, if the managing
underwriter determines in good faith that a lower number of
Registrable Securities held by Management Stockholders and
Additional Management Stockholders then such pro rata portion
should be included, then such lower number shall be included and,
as a result thereof, a greater number of Registrable Securities
owned by the other Stockholders may be sold; (y) third, subject to
Section 2.5(a), the securities the Company proposes to sell; and
(z) fourth, any securities other than Registrable Securities to be
sold by persons other than the Company included pursuant to
Section 2.5(a) hereof.
(c) Any Person other than Stockholders including any securities in such
registration pursuant to Article II hereof must pay its share of the
Registration Expenses as provided in Article VI hereof.
2.6 Selection of Underwriters. The Required 399 Stockholders will have
the right to select the underwriters and the managing underwriter to administer
any Demand Registration (which underwriters and managing underwriter shall be
reasonably acceptable to the Company).
2.7 Black-Out Rights and Postponement.
(a) The Company shall not be required to effect a Demand Registration if
the Company, within the 90-day period preceding the date of a request for a
Demand Registration, has effected a registration of securities in which the
Required 399 Stockholders were entitled to participate to the fullest extent
pursuant to Demand Registration rights under Article II or Piggyback
Registration rights under Article III.
(b) The Company may, upon written notice (a "Black-Out Notice") to the
Required 399 Stockholders or Required CMP Stockholders, as the case may be,
requesting a Demand Registration, require the Required 399 Stockholders or
Required CMP Stockholders, as the case may be, to withdraw such Demand
Registration upon the good faith determination by the Company that such
postponement is necessary (i) to avoid disclosure of material non-public
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information or (ii) as a result of a pending material financing or
acquisition transaction, and, in each case, the Required 399 Stockholders or
Required CMP Stockholders, as the case may be, may not request another Demand
Registration for a period of up to 60 days, as specified by the Company in
such Black-Out Notice. The Company may only give a Black-Out Notice where the
giving of such notice has been specifically approved by the Board which for
so long as the 399 Stockholders shall exercise their right to designate
directors, shall require Affirmative Board Vote. Upon receipt of a Black-Out
Notice, the related Demand Registration shall be deemed to be rescinded and
retracted and shall not be counted as a Demand Registration for any purpose.
The Company may not deliver more than two Black-Out Notices in any 12-month
period.
2.8 415 Registrations.
(a) The Required 399 Stockholders will be entitled to request one (1)
415 Registration in which the Company will pay all Registration Expenses.
Subject to the availability of required financial information, within 45 days
after the Company receives written notice of a request for a 415
Registration, the Company shall file with the SEC a registration statement
under the Securities Act for the 415 Registration. The Company shall use its
best efforts to cause the 415 Registration to be declared effective under the
Securities Act as soon as practical after filing, and once effective, the
Company shall (subject to the provisions of clause (ii) below) cause such 415
Registration to remain effective for such time period as is specified in such
request, but for no time period longer than the period ending on the earlier
of (i) the third anniversary of the date of filing of the 415 Registration,
(ii) the date on which all Registrable Securities requested to be included in
any Takedown (as defined below) have been sold pursuant to the 415
Registration or (iii) the date as of which there are no longer any
Registrable Securities requested to be included in any Takedown (as defined
below) in existence.
(b) If the Required 399 Stockholders notify the Company in writing that
they intend to effect the sale of all or substantially all of the Registrable
Securities held by such holders pursuant to a single integrated offering
pursuant to a then effective registration statement for a 415 Registration (a
"Takedown"), the Company and each holder of Registrable Securities shall not
effect any public sale or distribution (including sales pursuant to Rule 144)
of any of the Company's equity securities, or any securities convertible into
or exchangeable or exercisable for any such equity securities, during the
90-day period beginning on the date such notice of a Takedown is received.
(c) If in connection with any Takedown the managing underwriters
(selected in accordance with clause (d) below) advise the Company that, in
their opinion, the number of Registrable Securities and, if permitted
hereunder, other securities (if any) requested to be included in such
Takedown exceeds the number of Registrable Securities and other securities,
if any, which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such Takedown (i)
first, the number of Registrable Securities requested
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to be included in such Takedown by all holders thereof, pro rata, if
necessary, among such holders of Registrable Securities based on the number
of shares of Registrable Securities owned by each such holder and requested
to be included in such Takedown, and (ii) second, any other securities of the
Company requested to be included in such Takedown by all holders thereof, pro
rata, if necessary, on the basis of the number of shares of such other
securities owned by each such holder.
(d) The Required 399 Stockholders shall have the right to retain and
select an investment banker and manager to administer the 415 Registration
and any Takedown pursuant thereto.
(e) The Company will pay all Registration Expenses in connection with
any such 415 Registration (including, without limitation, all fees and
expenses of the investment banker and manager) (excluding discounts and
commissions).
ARTICLE III
PIGGYBACK REGISTRATIONS
3.1 Right to Piggyback. Whenever the Company proposes (other than
pursuant to a Demand Registration or an Initial Public Offering (unless
otherwise agreed by the Company)) to register (whether for the Company's own
account or for the account of any other Person) any of its equity securities
under the Securities Act (other than on Forms S-4 or S-8 or any successor forms)
(a "Piggyback Registration"), the Company will give prompt written notice to all
399 Stockholders, CMP Stockholders, Management Stockholders and Additional
Stockholders (the "Piggyback Holders") of its intention to effect such a
registration. Such notice shall offer each Piggyback Holder the opportunity to
register, on the same terms and conditions available to the Company, such number
of such Piggyback Holder's Registrable Securities as such Piggyback Holder may
request. The Company will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein by the Piggyback Holders within 30 days after their receipt of
the Company's notice, subject to the provisions of Sections 3.3 and 3.4.
3.2 Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by the Company in all Piggyback
Registrations.
3.3 Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriter advises the Company in writing that in its opinion the number of
securities requested to be included in such registration is such that the
success of the offering would be materially and adversely affected, the Company
will include any securities to be sold in such Piggyback Registration in the
following order: (a) first, the securities which the Company proposes to sell;
(b) second, the Registrable
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Securities requested to be included in such registration by the Piggyback
Holders, provided that if the managing underwriter determines in good faith that
a lower number of Registrable Securities should be included, then the Company
shall be required to include in such registration only that lower number of
Registrable Securities, and the Piggyback Holders shall participate in such
registration on a pro rata basis in accordance with the number of Registrable
Securities requested to be included in such registration by each Piggyback
Holder, provided, further, that if the managing underwriter determines in good
faith that a lower number of Registrable Securities held by Management
Stockholders and Additional Management Stockholders than such pro rata portion
should be included, then such lower number shall be included and, as a result
thereof, a greater number of Registrable Securities owned by the other
Stockholders may be sold; and (c) third, any other securities proposed to be
included in such registration.
3.4 Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriter advises the Company in writing that in
their opinion the number of Registrable Securities requested to be included
exceeds the number of Registrable Securities which can be included in such
registration within a price range acceptable to the holders of the Company's
securities on whose behalf the registration is being effected, the Company will
include any securities to be sold in such registration in the following order:
(a) first, the securities which such holders propose to sell; (b) second, the
Registrable Securities requested to be included in such registration by the
Piggyback Holders, provided that if the managing underwriter determines in good
faith that a lower number of Registrable Securities should be included, then the
Company shall be required to include in such registration only that lower number
of Registrable Securities, and the Piggyback Holders shall participate in such
registration on a pro rata basis in accordance with the number of Registrable
Securities requested to be included in such registration by each Piggyback
Holder, provided, further, that if the managing underwriter determines in good
faith that a lower number of Registrable Securities held by Management
Stockholders and Additional Management Stockholders than such pro rata portion
should be included, then such lower number shall be included and, as a result
thereof, a greater number of Registrable Securities owned by the other
Stockholders may be sold; and (c) third, any other securities proposed to be
included in such registration.
ARTICLE IV
HOLDBACK AGREEMENTS
4.1 Holdback. Each holder of Registrable Securities agrees not to
effect any public sale or distribution of Registrable Securities, or any
securities convertible, exchangeable or exercisable for or into Registrable
Securities, during the seven days prior to, and the time period reasonably
requested by the managing underwriter (not to exceed 180 days) beginning on, the
effective date of (a) an Initial Public Offering, (b) any underwritten Demand
Registration or (c) any
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underwritten Piggyback Registration in which such holder had an opportunity to
participate without cutback under Article III hereof (in each case except as
part of such Initial Public Offering or underwritten registration), unless the
managing underwriter of such Initial Public Offering or underwritten
registration otherwise agrees.
4.2 Company Holdback. The Company agrees (a) not to effect any public
sale or distribution of its equity securities, or any securities convertible,
exchangeable or exercisable for or into such securities, during the 14 days
prior to, and during the 180-day period beginning on, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration in
which holders of Registrable Securities are selling stockholders (except as part
of such underwritten registration or pursuant to registration on Form S-4 or S-8
or any similar successor form), unless the managing underwriter of such
underwritten Demand Registration or underwritten Piggyback Registration
otherwise agrees, and (b) to use all reasonable efforts to cause each holder of
at least 5% (on a Diluted Basis) of its equity securities to agree not to effect
any public sale or distribution of any such equity securities or any securities
convertible, exchangeable or exercisable for or into such equity securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the managing underwriter of such underwritten
Demand Registration or underwritten Piggyback Registration otherwise agrees.
ARTICLE V
REGISTRATION PROCEDURES
5.1 Procedures. Whenever the Stockholders have requested that any
Registrable Securities be registered in accordance with Article II or III, the
Company will use all reasonable efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company as expeditiously as
possible will (or, in the case of clause (p) below, will not):
(a) prepare and file with the Commission a registration statement with
respect to such Qualifying Offering or such Registrable Securities, as the
case may be (such registration statement to include in each case all
information which the holders of the Registrable Securities to be registered
thereby, if any, shall reasonably request) and use all reasonable efforts to
cause such registration statement to become effective, provided that as
promptly as practicable before filing a registration statement or prospectus
or any amendments or supplements thereto, the Company will (i) furnish copies
of all such documents proposed to be filed to one counsel selected by the
Required 399 Stockholders, and the Company shall not file any such documents
to which any such relevant counsel shall have reasonably objected on the
grounds that such document does not comply in all material respects with the
requirements of the Securities Act, and (ii) notify each 399 Stockholder, in
the case of a Qualifying Offering requested pursuant Section 2.1(a), and each
holder of
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Registration Rights Agreement
Registrable Securities covered by such registration statement, in all other
cases, of (x) any request by the Commission to amend such registration
statement or amend or supplement any prospectus, or (y) any stop order issued
or threatened by the Commission, and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered;
(b) (i) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective at all times during the period commencing on the effective date of
such registration statement and ending on the first date as of which all
Registrable Securities (and all shares of Common Stock to be sold by the
Company, in the case of a Qualifying Offering requested pursuant to Section
2.1(a)) covered by such registration statement are sold in accordance with
the intended plan of distribution set forth in such registration statement
and (ii) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) furnish, without charge, (i) in the case of a Qualifying Offering
requested pursuant to Section 2.1(a), to each 399 Stockholder, five conformed
copies of such registration statement, each amendment and supplement thereto
and the prospectus included in such registration statement (including each
preliminary prospectus and, in the case of two of such copies, including all
exhibits thereto and documents incorporated by reference therein), and (ii)
in all other cases, to each seller of Registrable Securities covered by such
registration statement, such number of conformed copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus and, in
each case, including all exhibits thereto and documents incorporated by
reference therein) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify the Registrable
Securities, if any, covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as any seller thereof shall
reasonably request, to keep such registration or qualification in effect for
so long as such registration statement remains in effect and to do any and
all other acts and things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such jurisdictions of any
such Registrable Securities owned by such seller; provided, however, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
clause (d), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
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Registration Rights Agreement
(e) furnish to each seller of the Registrable Securities, if any,
covered by such registration statement a signed copy, addressed to such
seller (and the underwriters, if any) of an opinion of counsel for the
Company or special counsel to the selling stockholders, dated the effective
date of such registration statement (and, if such registration statement
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), reasonably satisfactory in form and substance to
such seller, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) as are
customarily covered in opinions of issuer's counsel delivered to the
underwriters in underwritten public offerings, and such other legal matters
as the seller (or the underwriters, if any) may reasonably request;
(f) notify each 399 Stockholder (in the case of a Qualifying Offering
requested pursuant to Section 2.1(a)) and each seller of Registrable
Securities covered by such registration statement (in all other cases), at a
time when a prospectus relating to such Qualifying Offering or Registrable
Securities (as the case may be) is required to be delivered under the
Securities Act, of the occurrence of any event known to the Company as a
result of which the prospectus included in such registration statement, as
then in effect, contains an untrue statement of a material fact or omits to
state any fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made; and, at the request of any seller of Registrable Securities
covered by such registration statement, (i) the Company will prepare and
furnish such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include 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 not misleading in the light of the circumstances under
which they were made and (ii) the Company shall extend the period during
which such registration statement shall be maintained effective by the number
of days during the period from and including the date of the giving of such
notice to such seller to the date when the Company made available to such
seller an appropriately amended or supplemented prospectus;
(g) cause the Registrable Securities, if any, covered by such
registration statement to be listed on each securities exchange on which
similar securities issued by the Company are then listed and to enter into
such customary agreements as may be required in furtherance thereof,
including without limitation listing applications and indemnification
agreements in customary form;
(h) provide a transfer agent and registrar for the Registrable
Securities, if any, covered by such registration statement not later than the
effective date of such registration statement;
(i) enter into such customary arrangements and take all such other
actions as the holders of a majority (by number of shares) of the Registrable
Securities, if any, covered by such registration statement or the
underwriters, if any, reasonably request in order to expedite or facilitate
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Registration Rights Agreement
the Qualifying Offering or the disposition of such Registrable Securities
(including using its best efforts to effect a stock split or a combination of
shares);
(j) make available for inspection by any seller of Registrable
Securities covered by such registration statement, any underwriter
participating in any disposition of securities pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company and all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda
relating to discussions with the Commission or its staff in connection with
such registration statement, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
(k) subject to the other provisions hereof, use all reasonable efforts
to cause the Registrable Securities, if any, covered by such registration
statement to be registered with or approved by such governmental agencies or
authorities or self-regulatory organizations as may be necessary to enable
the sellers thereof to consummate the disposition of such Registrable
Securities;
(l) use all reasonable efforts to obtain a "cold comfort" letter, dated
the effective date of such registration statement (and, if such registration
includes an underwritten offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants who
have certified the Company's financial statements included in such
registration statement, addressed to the Company, to each seller of the
Registrable Securities (if any) covered by such registration statement, and
to the underwriters, if any, covering substantially the same matters with
respect to such registration statement (and the prospectus included therein)
and with respect to events subsequent to the date of such financial
statements, as are customarily covered in accountants' letters delivered to
the underwriters in underwritten public offerings of securities and such
other financial matters as any such seller or the underwriters, if any, may
reasonably request;
(m) otherwise use all reasonable efforts to comply with all applicable
rules and regulations of the Commission and make available to its security
holders, in each case as soon as practicable, an earnings statement covering
a period of at least twelve months, beginning with the first month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;
(n) permit any holder of Registrable Securities covered by such
registration statement, which holder, in the sole judgment, exercised in good
faith, of such holder might be deemed to be a controlling person of the
Company (within the meaning of the Securities Act or the Exchange Act) to
participate in the preparation of such registration statement and to include
therein
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Registration Rights Agreement
material, furnished to the Company in writing, which in the reasonable
judgment of such holder should be included and which is reasonably acceptable
to the Company;
(o) use all reasonable efforts to obtain the lifting at the earliest
possible time of any stop order suspending the effectiveness of such
registration statement or of any order preventing or suspending the use of
any preliminary prospectus included therein;
(p) at any time file or make any amendment to such registration
statement, or any amendment of or supplement to the prospectus included
therein (including amendments of the documents incorporated by reference into
the prospectus), (i) of which each 399 Stockholder and the managing
underwriters (in the case of a Qualifying Offering requested pursuant to
Section 2.1(a)) or each seller of Registrable Securities covered by such
registration statement or the managing underwriters, if any (in all other
cases), shall not have previously been advised and furnished a copy or (ii)
to which the Required 399 Stockholders, the managing underwriters or counsel
for the Required 399 Stockholders or the managing underwriters (in the case
of a Qualifying Offering requested pursuant to Section 2.1(a)), or the
sellers of a majority (by number of shares) of the Registrable Securities
covered by such registration statement, the managing underwriters (if any) or
counsel for such sellers or any such managing underwriters (in all other
cases), shall reasonably object;
(q) make such representations and warranties (subject to appropriate
disclosure schedule exceptions) to the sellers of the Registrable Securities,
if any, covered by such registration statement and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to
underwriters and selling holders, as the case may be, in underwritten public
offerings of substantially the same type; and
(r) if such registration statement refers to any seller of Registrable
Securities covered thereby by name or otherwise as the holder of any
securities of the Company then (whether or not such seller is or might be
deemed to be a controlling person of the Company), (i) at the request of such
seller, insert therein language, in form and substance reasonably
satisfactory to such seller, the Company and the managing underwriters, if
any, to the effect that the holding by such seller of such securities is not
to be construed as a recommendation by such seller of the investment quality
of the Registrable Securities or the Company's other securities covered
thereby and that such holding does not imply that such seller will assist in
meeting any future financial requirements of the Company, or (ii) in the
event that such reference to such seller by name or otherwise is not required
by the Securities Act, any similar Federal or state statute, or any rule or
regulation of any regulatory body having jurisdiction over the offering, at
the request of such seller, delete the reference to such seller.
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Registration Rights Agreement
ARTICLE VI
REGISTRATION EXPENSES
6.1 Fees Generally. All expenses incident to the Company's performance
of or compliance with this Agreement, including, without limitation, internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance,
the expenses and fees for listing securities on one or more securities exchanges
in connection with a Qualifying Offering or pursuant to clause (g) of Article V,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding underwriting fees, discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses") shall be borne by the Company, except
that each Stockholder shall pay any underwriting fees, discounts or commissions
attributable to the sale of its Registrable Securities.
6.2 Counsel Fees. In connection with each Demand Registration, the
Company will reimburse the 399 Stockholders for the reasonable fees and
disbursements of one counsel selected by the Required 399 Stockholders.
ARTICLE VII
UNDERWRITTEN OFFERINGS
7.1 Demand Underwritten Offerings. If requested by the underwriters for
any underwritten offering of Registrable Securities pursuant to a Demand
Registration, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to be satisfactory in substance
and form to the Required 399 Stockholders or the Required CMP Stockholders, as
the case may be, requesting such Demand Registration (or, in the case of a
Qualifying Offering requested pursuant to Section 2.1(a), the holders of a
majority (by number of shares) of the Registrable Securities included in such
Demand Registration) and the underwriters, to contain such representations and
warranties by the Company and such other terms as are generally included in
agreements of this type, including indemnities customarily included in such
agreements, and to be otherwise reasonably satisfactory in form and substance to
the Company. The holders of the Registrable Securities to be distributed by such
underwriters will cooperate in good faith with the Company in the negotiation of
the underwriting agreement. The holders of the Registrable Securities to be
distributed by such underwriters shall be parties to such underwriting agreement
and may, at their option, require that any or all of the representations and
warranties by, and the other
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Registration Rights Agreement
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be
conditions precedent to the obligations of such holders of Registrable
Securities. The Company shall cooperate with any such holder of Registrable
Securities in order to limit any representations or warranties to, or agreements
with, the Company or the underwriters to be made by such holder only to
representations, warranties or agreements regarding such holder, such holder's
Registrable Securities, such holder's intended method of distribution and any
other representation required by applicable law.
7.2 Incidental Underwritten Offerings. If the Company at any time
proposes to register any of its equity securities under the Securities Act as
contemplated by Article III and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any
Piggyback Holder as provided in Article III, arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such Piggyback
Holder, subject to the limitations set forth in Article III, among the
securities to be distributed by such underwriters. The holders of the
Registrable Securities to be distributed by such underwriters may be parties to
the underwriting agreement between the Company and such underwriters, and may,
at their option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of such holders
of Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be
conditions precedent to the obligations of such holders of Registrable
Securities. The Company shall cooperate with any such holder of Registrable
Securities in order to limit any representations or warranties to, or agreements
with, the Company or the underwriters to be made by such holder only to
representations, warranties or agreements regarding such holder, such holder's
Registrable Securities, such holder's intended method of distribution and any
other representation required by applicable law.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, each of the holders of
any Registrable Securities covered by a registration statement that has been
filed with the Commission pursuant to this Agreement, and each underwriter for
such holder, each other Person, if any, who controls such holder or underwriter
within the meaning of the Securities Act or the Exchange Act, and each of their
respective directors, general partners and officers, as follows:
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Registration Rights Agreement
(a) against any and all loss, liability, claim, damage or expense (other
than amounts paid in settlement) incurred by such Person arising out of
or based upon an untrue statement or alleged untrue statement of a
material fact contained in such registration statement (or any
amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or prospectus
included therein (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of 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;
(b) against any and all loss, liability, claim, damage and expense incurred
by such Person to the extent of the aggregate amount paid in settlement
of any litigation, or any investigation or proceeding by any
governmental agency or body, in each case whether commenced or
threatened, or of any claim whatsoever, that is based upon any such
untrue statement or omission or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company (which consent shall not be unreasonably withheld or
delayed); and
(c) against any and all expense incurred by such Person in connection with
investigating, preparing or defending against any litigation or any
investigation or proceeding by any governmental agency or body, in each
case whether commenced or threatened in writing, or against any claim
whatsoever, that is based upon any such untrue statement or omission or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under clause (a) or (b) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of or based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such holder expressly for use in the preparation of
any registration statement (or any amendment or supplement thereto), including
all documents incorporated therein by reference, or in any preliminary
prospectus or prospectus included therein (or any amendment or supplement
thereto); and provided further, however, that the Company will not be liable to
any holder of Registrable Securities (or any other indemnified Person) under the
indemnity agreement in this Section 8.1, with respect to any preliminary
prospectus or the final prospectus or the final prospectus as amended or
supplemented, as the case may be, to the extent that
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Registration Rights Agreement
any such loss, liability, claim, damage or expense of such holder (or other
indemnified Person) results from the fact that such holder sold Registrable
Securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus or of the
final prospectus as then amended or supplemented, whichever is most recent, if
the Company has previously and timely furnished copies thereof to such holder.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder or any other Person eligible
for indemnification under this Section 8.1, and shall survive the transfer of
such securities by such seller.
8.2 Indemnification by a Selling Stockholder. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder agrees to severally and not jointly indemnify
and hold harmless (in the same manner and to the same extent as set forth in
Section 8.1 of this Agreement), to the extent permitted by law, the Company,
each underwriter for any such holder and their respective directors, officers
and controlling Persons, and their respective directors, officers and general
partners, with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary, final or
summary prospectus included therein, or any amendment or supplement thereto, or
to any such prospectus, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information that relates only to such holder or the plan of distribution that is
expressly furnished to the Company by or on behalf of such holder for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or such underwriter or holder, as the case may be, or any of their respective
directors, officers, controlling Persons or general partners and shall survive
the transfer of Registrable Securities by such holder. With respect to each
claim pursuant to this Section 8.2, each holder's maximum liability under this
Section 8.2 shall be limited to an amount equal to the net proceeds actually
received by such holder (after deducting any underwriting fees, discount and
expenses) from the sale of Registrable Securities being sold pursuant to such
registration statement or prospectus by such holder.
8.3 Indemnification Procedure. Within 10 days after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 8.1 or Section 8.2, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under Section 8.1 or Section 8.2 except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action or proceeding is brought against an indemnified party, the
indemnifying party will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel
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Registration Rights Agreement
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party for any legal fees and expenses subsequently incurred by the latter in
connection with the defense thereof, unless in such indemnified party's
reasonable judgment an actual or potential conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, in
which case the indemnifying party shall not be liable for the fees and expenses
of (i) in the case of a claim referred to in Section 8.1, more than one counsel
(in addition to any local counsel) for all indemnified parties selected by the
holders of a majority (by number of shares) of the Registrable Securities held
by such indemnified parties, or (ii) in the case of a claim referred to in
Section 8.2, more than one counsel (in addition to any local counsel) for the
Company, in each case in connection with any one action or separate but similar
or related actions or proceedings. An indemnifying party who is not entitled to
(pursuant to the immediately preceding sentence), or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel (in addition to any local counsel) for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party an actual or potential conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional counsel or counsels
as may be reasonable in light of such conflict. The indemnifying party will not,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit, investigation or proceeding in respect of which
indemnification may be sought hereunder (whether or not such indemnified party
or any Person who controls such indemnified party is a party to such claim,
action, suit, investigation or proceeding), unless such settlement, compromise
or consent includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit, investigation or proceeding.
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any indemnified party will have
the right to retain, at its own expense, counsel with respect to the defense of
a claim.
8.4 Underwriting Agreement. The Company, and each holder of Registrable
Securities requesting registration of all or any part of such holder's
Registrable Securities pursuant to Article II or Article III, shall provide for
the foregoing indemnity (with appropriate modifications) in any underwriting
agreement entered into in connection with a Demand Registration or a Piggyback
Registration with respect to any required registration or other qualification of
Registrable Securities under any Federal or state law or regulation of any
governmental authority.
8.5 Contribution. If the indemnification provided for in Sections 8.1
and 8.2 of this Agreement is unavailable to hold harmless an indemnified party
under such Sections, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in Section 8.1 or Section 8.2
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Registration Rights Agreement
of this Agreement in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party, on the one hand, and the
indemnified party, on the other hand, from such offering of securities. If,
however, the allocation provided in the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the indemnifying party, on the one hand, and the indemnified party, on
the other hand, as well as any other relevant equitable considerations. Without
limiting the generality of the foregoing, the relative fault shall be determined
by reference to, among other things, the parties' relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission,
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 indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 8.5
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first and second sentences of this Section 8.5. The amount
paid by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in the first sentence of this Section 8.5
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim (which shall be limited as provided in Section 8.3 of this Agreement if
the indemnifying party has assumed the defense of any such action in accordance
with the provisions thereof) which is the subject of this Section 8.5. Promptly
after receipt by an indemnified party under this Section 8.5 of notice of the
commencement of any action against such party in respect of which a claim for
contribution may be made against an indemnifying party under this Section 8.5,
such indemnified party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in Section 8.3 of this Agreement
has not been given with respect to such action; provided that the omission to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability which it may otherwise have to any indemnified party under this
Section 8.5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. The Company and each holder of
Registrable Securities agrees with each other and the underwriters of the
Registrable Securities, if requested by such underwriters, that (a) the
underwriters' portion of such contribution shall not exceed the underwriting
discount and (b) that the amount of any contribution shall not exceed an amount
equal to the net proceeds actually received by such indemnifying party from the
sale of Registrable Securities in the offering to which the losses, liabilities,
claims, damages or expenses of the indemnified parties relate. 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.
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Registration Rights Agreement
8.6 Periodic Payments. The indemnification required by this Article
VIII shall be made by periodic payments of the amount thereof during the course
of the relevant investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
ARTICLE IX
RULE 144
9.1 Compliance. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will file the reports required to be filed by it under
the Securities Act and the Exchange Act (or, if the Company is not required to
file such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information), and it will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
shares of Registrable Securities without registration under the Securities Act
in compliance with (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
ARTICLE X
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
10.1 Participation. No holder of Registrable Securities may participate
in any underwritten registration hereunder unless such holder (a) agrees to sell
such holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, escrow agreements and other
documents reasonably required under the terms of such underwriting arrangements
and consistent with the provisions of this Agreement.
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Registration Rights Agreement
ARTICLE XI
MISCELLANEOUS
11.1 No Inconsistent Agreements. The Company represents and warrants
that it does not currently have, and covenants that it will not hereafter enter
into, any agreement which is inconsistent with, or would otherwise restrict the
performance by the Company of, its obligations hereunder.
11.2 Adjustments Affecting Registrable Securities. The Company will use
all reasonable efforts not to take any action, and not to fail to take any
action which it may properly take, with respect to its securities if such action
or failure to act would adversely affect (a) the ability of the holders of
Registrable Securities to include Registrable Securities in a registration
undertaken pursuant to this Agreement or (b) to the extent within the Company's
control, would adversely affect the marketability of such Registrable Securities
in any such registration (it being understood that the actions referred to in
this Section 11.2 include effecting a stock split or a combination of shares).
11.3 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy that may be available to any of them at law or equity; provided, however,
that each of the parties hereto agrees to provide the other parties with written
notice at least two business days prior to filing any motion or other pleading
seeking a temporary restraining order, a temporary or permanent injunction,
specific performance, or any other equitable remedy and to give the other
parties and their counsel a reasonable opportunity to attend and participate in
any judicial or administrative hearing or other proceeding held to adjudicate or
rule upon any such motion or pleading.
11.4 Actions Taken; Amendments and Waivers. Except as otherwise
provided herein, no modification, amendment or waiver of any provision of this
Agreement will be effective against the Company or any holder of Registrable
Securities, unless such modification, amendment or waiver is approved in writing
by the Company, the Required 399 Stockholders and Stockholders (other than the
399 Stockholders) which then hold in the aggregate more than 50% of the
Registrable Securities held by such Stockholders on a Diluted Basis; provided,
that, no such modification, amendment or waiver may eliminate the right of the
CMP Stockholders to request a Demand Registration or modify or adjust any
provisions governing the priorities set forth in Sections 2.5, 3.3 or 3.4 of
this Agreement without the prior written consent of the Required CMP
Stockholders. Each of the Stockholders and the Company shall be bound by each
modification, amendment or waiver authorized in accordance with this Section
11.4, regardless of whether the certificates evidencing the Registrable
Securities shall have been marked to indicate such modification, amendment or
waiver. The failure of any party hereto to enforce any of the provisions of this
Agreement will in no way be
23
Registration Rights Agreement
construed as a waiver of such provisions and will not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
11.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities,
except to the extent reserved to or by the transferor in connection with any
such transfer; provided, however, that the benefits of this Agreement shall
inure to and be enforceable by any transferee of Registrable Securities only if
such transferee shall have acquired such Registrable Securities in accordance
with the terms of the Investors' Agreement and shall have executed a
Registration Rights Joinder Agreement.
11.6 Notices.
(a) All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission or mailed (by
registered or certified mail, postage prepaid, return receipt requested) or
delivered by reputable overnight courier, fee prepaid, to the parties at the
following addresses or facsimile numbers:
If to any 399 Stockholder, to:
399 Venture Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
24
Registration Rights Agreement
If to the Company, to:
Allied Digital Technologies Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
with a copy to:
399 Venture Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to any CMP Stockholder, to:
Citicorp Mezzanine Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
and
Fleet Corporate Finance, Inc.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop MA OF D03L
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: 212-446-4900
Attn: ▇▇▇▇ ▇▇▇▇, Esq.
25
Registration Rights Agreement
If to any Management Stockholder or Additional Stockholders, to the
address on file with the Company.
(b) All such notices, requests and other communications will be deemed
delivered upon receipt. Any party hereto may from time to time change its
address, facsimile number or other information for the purpose of notices to
such party by giving notice specifying such change to the other parties
hereto in accordance with Section 11.6(a).
11.7 Headings; Certain Conventions. The headings used in this Agreement
are for convenience of reference only and shall not define, limit or otherwise
affect any of the terms or provisions hereof. Unless the context otherwise
expressly requires, all references herein to Articles, Sections and Exhibits are
to Articles and Sections of, and Exhibits to, this Agreement. The words
"herein," "hereunder" and "hereof" and words of similar import refer to this
Agreement as a whole and not to any particular Section or provision. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation".
11.8 Gender. Whenever the pronouns "he" or "his" are used herein they
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
11.9 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance here from and (iv) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part
of this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible.
11.10 Governing Law. The corporate laws of the State of Delaware will
govern all questions concerning the relative rights of the Company and its
stockholders hereunder. All other questions concerning the construction,
validity and interpretation of this Agreement shall be governed and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
26
Registration Rights Agreement
11.11 Consent to Jurisdiction and Service of Process. EACH OF THE
PARTIES HERETO CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES
THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT MAY BE LITIGATED IN
SUCH COURTS. EACH OF THE PARTIES HERETO ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES HERETO FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTY AT THE ADDRESS
SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 15 DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY
PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR
TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO
IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY
APPLICABLE LAW.
11.12 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. EACH OF THE PARTIES HERETO ALSO WAIVES ANY
BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF SUCH PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
27
Registration Rights Agreement
11.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[Signature Page to Follow]
28
Registration Rights Agreement
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
ALLIED DIGITAL TECHNOLOGIES CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
399 VENTURE PARTNERS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
MANAGEMENT MEMBERS
/s/ ▇▇▇▇ Kennneth ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page to Registration Rights Agreement]
NY02A/216154.9
Registration Rights Agreement
/s/ ▇▇▇▇▇ ▇▇▇▇▇ Hill
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
[Signature Page to Registration Rights Agreement]
Registration Rights Agreement
CITICORP MEZZANINE PARTNERS, L.P.
By: Citicorp Capital Investors, Ltd.
Its: General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
FLEET CORPORATE FINANCE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director of Mainsail Capital
Registration Rights Agreement
[Signature Page to Registration Rights Agreement]
Registration Rights Agreement
Exhibit A-1
Form of Registration Rights Joinder Agreement
For Permitted Transferees
Allied Digital Technologies Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the transfer to the undersigned of [describe
security being transferred] of Allied Digital Technologies Corp., a Delaware
corporation (the "Company"), the undersigned represents that it is a Permitted
Transferee of [insert name of transferor] and agrees that, as of the date
written below, [he] [she] [it] shall become a party to, and a Permitted
Transferee as defined in, that certain Registration Rights Agreement dated as of
______ __, 1998, as such agreement may have been amended from time to time (the
"Agreement"), among the Company and the persons named therein, and as a
Permitted Transferee shall be fully bound by, and subject to, all of the
covenants, terms and conditions of the Agreement that were applicable to the
undersigned's transferor, as though an original party thereto and shall be
deemed a [Management Stockholder and/or an Additional Stockholder 399
Stockholder] for all purposes thereof.
Executed as of the day of , .
SIGNATORY:
---------------------------------
Address:
---------------------------------
---------------------------------
ACKNOWLEDGED AND ACCEPTED:
ALLIED DIGITAL TECHNOLOGIES CORP.
By
------------------------------------
Name:
Title:
Registration Rights Agreement
Exhibit A-2
Form of Registration Rights Joinder Agreement
For Additional Stockholders
(including Additional Management Stockholders)
Allied Digital Technologies Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the issuance to the undersigned of [describe
security being issued] of Allied Digital Technologies Corp., a Delaware
corporation (the "Company"), the undersigned agrees that, as of the date written
below, [he] [she] [it] shall become a party to [and a Management Stockholder
under] that certain Registration Rights Agreement dated as of ______ __, 1998,
as such agreement may have been amended from time to time (the "Agreement"),
among the Company and the persons named therein, and shall be fully bound by,
and subject to, the covenants, terms and conditions of the Agreement as provided
under Section 11.5 of the Agreement as though an original party thereto.
Executed as of the day of , .
SIGNATORY:
---------------------------------
Address:
---------------------------------
---------------------------------
ACKNOWLEDGED AND ACCEPTED:
ALLIED DIGITAL TECHNOLOGIES CORP.
By
------------------------------------
Name:
Title:
Registration Rights Agreement
Exhibit A-3
Form of Registration Rights Joinder Agreement
For Transferees under Section 2.4 of the Investors' Agreement
Allied Digital Technologies Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the transfer to the undersigned of [describe
security being transferred] of Allied Digital Technologies Corp., a Delaware
corporation (the "Company"), the undersigned agrees that, as of the date written
below, [he] [she] [it] shall become a party to and an Additional Stockholder
under that certain Registration Rights Agreement dated as of _______ __, 1998,
as such agreement may have been amended from time to time (the "Agreement"),
among the Company and the persons named therein, and shall be fully bound by,
and subject to, the covenants, terms and conditions of the Agreement as provided
under Section 11.5 of the Agreement as though an original party thereto.
Executed as of the day of , .
SIGNATORY:
---------------------------------
Address:
---------------------------------
---------------------------------
ACKNOWLEDGED AND ACCEPTED:
ALLIED DIGITAL TECHNOLOGIES CORP.
By
------------------------------------
Name:
Title: