Exhibit 10.46
WARRANT REGISTRATION RIGHTS AGREEMENT
Dated as of December 18, 1997
by and among
CONCENTRIC NETWORK CORPORATION,
UBS SECURITIES LLC,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
and
WHEAT, FIRST SECURITIES, INC.
THIS WARRANT REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 18, 1997, by and between CONCENTRIC NETWORK
CORPORATION, a Delaware corporation (the "Company"), UBS SECURITIES LLC, BEAR,
▇▇▇▇▇▇▇ & CO. INC. and WHEAT, FIRST SECURITIES, INC. (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated December
15, 1997, between the Company and the Initial Purchasers (the "Purchase
Agreement"), relating to, among other things, the sale by the Company to the
Initial Purchasers of an aggregate of 150,000 Units, consisting in the aggregate
of (i) $150,000,000 principal amount at maturity of 12 3/4% Senior Notes due
2007 (the "Notes") and (ii) 150,000 Warrants (the "Unit Warrants"), each
representing the right to purchase initially 6.34072 shares of Common Stock, par
value $.001 per share, of the Company (the "Common Stock"). The Warrants have
been issued pursuant to the Warrant Agreement dated as of the date hereof
between the Company and Chase Manhattan Bank and Trust Company, National
Association as warrant agent (the "Warrant Agreement"). In order to induce the
Initial Purchasers to enter into the Purchase Agreement, the Company has agreed
to provide to the Initial Purchasers and the Holders (as defined herein), among
other things, the registration rights for the Warrant Shares (as defined herein)
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
Section 1. Definitions. As used in this agreement, the following defined
-----------
terms shall have the following meanings:
"Advice" has the meaning ascribed to such term in the last paragraph of
Section 4 hereof.
"Black Out Period" has the meaning ascribed to such term in Section 2.3(b)
hereof.
"Business Day" shall mean a day that is not a Legal Holiday.
"Common Stock" has the meaning ascribed to such term in the preamble
hereof.
"Company" shall have the meaning ascribed to that term in the preamble
hereof and shall also include the Company's permitted successors and assigns.
"Demand Registration" has the meaning ascribed to such term in Section
2.1(a) hereof.
"DTC" has the meaning ascribed to such term in Section 4(i) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Expiration Date" has the meaning ascribed to such term in the Warrant
Agreement.
"Holder" shall mean the Initial Purchasers, for so long as they own any
Warrants or Warrant Shares, and each of their successors, assigns and direct and
indirect transferees who become registered owners of such Warrants or Warrant
Shares.
"Included Securities" has the meaning ascribed to such term in Section
2.1(a) hereof.
"indemnified party" has the meaning ascribed to such term in Section 5(c)
hereof.
"indemnifying party" has the meaning ascribed to such term in Section 5(c)
hereof.
"Indenture" means the Indenture, of even date herewith, between the Company
and Chase Manhattan Bank and Trust Company, National Association, as Trustee,
pursuant to which the Notes are issued.
"Initial Purchasers" has the meaning ascribed to such term in the preamble
hereof.
"Inspectors" has the meaning ascribed to such term in Section 4(n) hereof.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which banking
institutions in New York, New York are required by law, regulation or executive
order to remain closed.
"Notes" has the meaning ascribed to such term in the preamble hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Piggy-Back Registration" has the meaning ascribed to such term in Section
2.2 hereof.
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Purchase Agreement" has the meaning ascribed to such term in the preamble
hereof.
"Registrable Securities" means any of (i) the Warrant Shares and (ii) any
other securities issued or issuable with respect to any Warrant Shares by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise,
unless, in each case, such Warrant Shares and securities, if any, have
been offered and sold to the Holder pursuant to an effective Registration
Statement under the Securities Act declared effective
2.
prior to the exercisability of the Warrants or such Warrant Shares and
securities, if any, may be sold to the public pursuant to Rule 144 without any
restriction on the amount of securities which may be sold by such Holder or the
satisfaction of any condition. As to any particular Registrable Securities held
by a Holder, such securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the exercise or offering of such
securities by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been exercised and/or disposed of
by such Holder pursuant to such Registration Statement, (ii) such securities may
at the time of determination be sold to the public pursuant to Rule 144 without
any restriction on the amount of securities which may be sold by such Holder (or
any similar provision then in force, but not Rule 144A) promulgated under the
Securities Act without the lapse of any further time or the satisfaction of any
condition, (iii) such securities shall have been otherwise transferred by such
Holder and new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company or its transfer agent
and subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(iv) such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all SEC and stock exchange or National Association of Securities Dealers, Inc.
registration and filing fees and expenses, fees and expenses of compliance with
securities or blue sky laws (including, without limitation, reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), printing expenses, messenger,
telephone and delivery expenses, fees and disbursements of counsel for the
Company and all independent certified public accountants, the fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (but not including any underwriting discounts or commissions or
transfer taxes, if any, attributable to the sale of Registrable Securities by
Holders of such Registrable Securities) and other reasonable out-of-pocket
expenses of Holders (including the fees and expenses of one counsel for the
Holders to be selected by a majority of such Holders).
"Registration Statement" shall mean any appropriate registration statement
of the Company filed with the SEC pursuant to the Securities Act which covers
any of the Registrable Securities pursuant to the provisions of this Agreement
and all amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Requisite Securities" shall mean a number of Registrable Securities equal
to not less than 25% of the Registrable Securities held in the aggregate by all
Holders; provided, however, that with respect to any action to be taken at the
request of the Holders of the Registrable Securities prior to such time as the
Warrants have expired pursuant to the terms thereof and of the Warrant
Agreement, each Warrant outstanding shall be deemed to represent that number of
Registrable Securities for which such Warrant would be then exercisable (without
giving effect to the cashless (net) exercise feature referred to in the Warrant
Agreement).
3.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
"Rule 144A" shall mean Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Selling Holder" shall mean a Holder who is selling Registrable Securities
in accordance with the provisions of Section 2.1 or 2.2 hereof.
"Warrants" has the meaning ascribed to such term in the preamble hereof.
"Warrant Agent" means Chase Manhattan Bank and Trust Co., N.A. and any
successor Warrant Agent for the Warrants pursuant to the Warrant Agreement.
"Warrant Agreement" has the meaning ascribed to such term in the preamble
hereof.
"Warrant Shares" means the shares of Common Stock delivered or deliverable
upon exercise of the Warrants.
Section 2. Registration Rights.
-------------------
Section 2.1. Demand Registration.
-------------------
(a) General. At any time and from time to time after the
-------
first anniversary of the date of the Warrant Agreement, Holders owning,
individually or in the aggregate, not less than the Requisite Securities may
make a written request, on no more than three occasions (each, a "Demand
Registration"), that the Company register the resale of the Warrant Shares,
under the Securities Act. The Company shall file with the SEC and use its best
efforts to cause to become effective under the Securities Act a Registration
Statement with respect to such Registrable Securities within (i) 60 days of
receipt of such written request for a Demand Registration if the Company is then
eligible to register an offering pursuant to Form S-3 under the Securities Act;
(ii) 90 days of receipt of such written request for a Demand Registration if the
Company is not then eligible to register an offering pursuant to Form S-3 under
the Securities Act but is then qualified as a reporting company under the
Exchange Act; or (iii) 180 days of receipt of such written request for a Demand
Registration in any other case. Any such request will specify the number of
Registrable Securities proposed to be sold and will also specify
4.
the intended method of disposition thereof. The Company shall give written
notice of such registration request to all other Holders of Registrable
Securities within 15 business days after the receipt thereof. Within 10 days
after receipt by any Holder of Registrable Securities of such notice from the
Company, such Holder may request in writing that such Holder's Registrable
Securities be included in such Registration Statement and the Company shall
include in such Registration Statement the Registrable Securities of any such
Holder requested to be so included (the "Included Securities"). Each such
request by such other Holders shall specify the number of Included Securities
proposed to be sold and the intended method of disposition thereof. Subject to
Sections 2.1(b) and 2.1(e) hereof, the Company shall be required to register
Registrable Securities pursuant to this Section 2.1(a) on a maximum of three
separate occasions.
Subject to Section 2.1(e) hereof, no other securities of the Company except
(i) Registrable Securities held by any Holder, (ii) equity securities to be
offered and sold for the account of the Company and (iii) any equity securities
of the Company held by and any Person having "piggy-back" registration rights
pursuant to any contractual obligation of the Company shall be included in a
Demand Registration. The inclusion of any such securities for the account of
the Company or any other Person shall be on the same terms as that of the
Registrable Securities.
(b) Effective Registration. A Registration Statement will
----------------------
not be deemed to have been effected as a Demand Registration unless it has been
declared effective by the SEC and the Company has complied in all material
respects with all of its obligations under this Agreement with respect thereto;
provided, however, that if, after such Registration Statement has become
effective, the offering of Registrable Securities pursuant to such Registration
Statement is or becomes the subject of any stop order, injunction or other order
or requirement of the SEC or any other governmental or administrative agency or
court that prevents, restrains or otherwise limits the sale of Registrable
Securities pursuant to such Registration Statement for any reason not
attributable to any Holder participating in such registration and such restraint
is not lifted within 60 days after being imposed, such Registration Statement
will be deemed not to have been effected. If (i) a registration requested
pursuant to this Section 2.1 is deemed not to have been effected or (ii) a
Demand Registration does not remain effective under the Securities Act until at
least the earlier of (A) an aggregate of six months after the effective date
thereof or (B) the consummation of the distribution by the Holders of all of the
Registrable Securities covered thereby, then such registration shall not count
towards determining if the Company has satisfied its obligation to effect three
Demand Registrations pursuant to this Section 2.1. For purposes of calculating
the six month period referred to in the preceding sentence, any period of time
during which such Registration Statement was not in effect shall be excluded.
The Holders of Registrable Securities shall be permitted to withdraw all or any
part of the Registrable Securities from a Demand Registration at any time prior
to the effective date of such Demand Registration; provided, however, that
should the Holders of Registrable Securities remaining after such withdrawal
own, individually or in the aggregate, less than the Requisite Securities, the
Company shall have the right to terminate or withdraw any registration initiated
by it under Section 2.1 prior to the effectiveness of such registration.
5.
(c) Restrictions on Sale by Holders. Each Holder of
-------------------------------
Registrable Securities whose Registrable Securities are covered by a
Registration Statement filed pursuant to Section 2.1 and are to be sold by the
Holder thereunder agrees, if and to the extent reasonably requested by the
managing underwriter or underwriters in an underwritten offering of common stock
or common equivalents the gross proceeds of which equal at least $10.0 million,
not to effect any public sale or distribution of Registrable Securities of the
Company of the same class as any securities included in such Registration
Statement, including a sale pursuant to Rule 144 (except as part of such
underwritten offering), during the 10-day period prior to, and during the 180-
day period beginning on, the closing date of each underwritten offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or such managing underwriter or underwriters.
The foregoing provisions of Section 2.1(c) shall not apply to any Holder of
Registrable Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement; provided, however, that any
such Holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or distribution of any
Registrable Securities commencing on the date of sale of such Registrable
Securities unless it has provided 45 days' prior written notice of such sale or
distribution to the underwriter or underwriters.
(d) Underwritten Registrations. If any of the Registrable
--------------------------
Securities covered by a Demand Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Company and will be
reasonably acceptable to the Holders of not less than a majority of the
Registrable Securities to be sold thereunder. The Company shall obtain the
consent of a majority of the Holders of Registrable Securities in order for the
third registration pursuant to Section 2.1(a) to be an underwritten offering.
No Holder of Registrable Securities may participate in any underwritten
registration pursuant to a Registration Statement filed under this Agreement
unless such Holder (a) agrees to (i) sell such Holder's Registrable Securities
on the basis provided in and in compliance with the underwriting arrangements
and (ii) comply with Rules 101, 102 and 104 of Regulation M promulgated under
the Exchange Act and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
(e) Priority in Demand Registration. In a registration
-------------------------------
pursuant to Section 2.1 hereof involving an underwritten offering, if the
managing underwriter or underwriters of such underwritten offering have
informed, in writing, the Company and the Selling Holders who have requested
such Demand Registration or who have sought inclusion therein that in such
underwriter's or underwriters' opinion the total number of securities which the
Selling Holders and any other Person entitled to participate in such
registration pursuant to Section 2.1(a) hereof intend to include in such
offering is such as to adversely affect the success of such offering, including
the price at which such securities can be sold, then the Company will be
required to include in such registration only the amount of securities which it
is so advised should be included in such registration. In such event, securities
shall
6.
be registered in such registration in the following order of priority: (i)
first, the securities which have been requested to be included in such
registration by the Holders of Registrable Securities and the securities of
other Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Company (pro rata based on the amount of
securities held by the Holders of Registrable Securities and such Persons), and
(ii) second, provided that no securities sought to be included by the Holders or
any other Person sought to be included therein have been excluded from such
registration, securities to be offered and sold for the account of the Company.
If 25% or more of the Registrable Securities which the Holders have
requested to be included in a registration statement pursuant to Section 2.1
hereof have been excluded from such registration statement pursuant to the
provisions of the foregoing paragraph, then such registration shall not count
towards determining whether the Company has satisfied its obligation to effect
three Demand Registrations pursuant to Section 2.1 hereof.
Section 2.2. Piggy-Back Registration.
-----------------------
(a) General. If at any time after the first anniversary
-------
date of the Warrant Agreement the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering by the Company
for its own account or for the account of any of its security holders of any
class of its common equity securities (other than (i) a Registration Statement
on Form S-4 or S-8 (or any substitute form that may be adopted by the SEC or
other form of limited purpose), (ii) a Registration Statement filed in
connection with an exchange offer or offering of securities solely to the
Company's existing security holders, or (iii) a Registration Statement filed
pursuant to the exercise of "demand" registration rights of existing security
holders pursuant to a contractual commitment of the Company) then the Company
shall give written notice of such proposed filing to the Holders of Registrable
Securities as soon as practicable (but in no event fewer than 15 days before the
anticipated filing date or 10 days if the Company is subject to filing reports
under the Exchange Act and able to use Form S-3 under the Securities Act), and
such notice shall offer such Holders the opportunity to register such number of
shares of Registrable Securities as each such Holder may request in writing not
later than 5 days prior to the anticipated filing date of the Registration
Statement after receipt of such written notice from the Company (which request
shall specify the Registrable Securities intended to be disposed of by such
Selling Holder and the intended method of distribution thereof) (a "Piggy-Back
Registration"). The Company shall use its best efforts to keep such Piggy-Back
Registration continuously effective under the Securities Act until at least the
earlier of (A) 90 days after the effective date thereof or (B) the consummation
of the distribution by the Holders of all of the Registrable Securities covered
thereby. The Company shall use its commercially reasonable efforts to cause the
managing underwriter or underwriters, if any, of such proposed offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any similar
securities of the Company or any other security holder included therein, subject
to the restrictions set forth in Section 2.2(b), and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Selling Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.2 by giving timely written
notice to the Company of
7.
its request to withdraw. The Company may withdraw a Piggy-Back Registration at
any time prior to the time it becomes effective or the Company may elect to
delay the registration; provided, however, that the Company shall give prompt
written notice thereof to participating Selling Holders. The Company will pay
all Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2, and each Holder of
Registrable Securities shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a Registration Statement effected pursuant to
this Section 2.2.
No registration effected under this Section 2.2, and no failure to effect a
registration under this Section 2.2, shall relieve the Company of its obligation
to effect a registration pursuant to Section 2.1 hereof, and no failure to
effect a registration under this Section 2.2 and to complete the sale of
securities registered thereunder in connection therewith shall relieve the
Company of any other obligation under this Agreement.
(b) Priority in Piggy-Back Registration. In a registration
-----------------------------------
pursuant to Section 2.2 hereof involving an underwritten offering, if the
managing underwriter or underwriters of such underwritten offering have
informed, in writing, the Company and the Selling Holders requesting inclusion
in such offering that in such underwriter's or underwriters' opinion the total
number of securities which the Company, the Selling Holders and any other
Persons desiring to participate in such registration intend to include in such
offering is such as to adversely affect the success of such offering, including
the price at which such securities can be sold, then the Company will be
required to include in such registration only the amount of securities which it
is so advised should be included in such registration. In such event, securities
shall be registered in such offering in the following order of priority: (i)
first, the securities which the Company proposes to register, and (ii) second,
provided that no securities sought to be included by the Company have been
excluded from such registration, the securities which have been requested to be
included in such registration by the Holders of Registrable Securities and other
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments of the Company (pro rata based on the amount of
securities held by the Holders of Registrable Securities requesting such
inclusion and such Persons).
If, as a result of the provisions of this Section 2.2(b), any Selling
Holder shall not be entitled to include all Registrable Securities in a Piggy-
Back Registration that such Selling Holder has requested to be included, such
Selling Holder may elect to withdraw his request to include Registrable
Securities in such registration.
Section 2.3. Limitations, Conditions and Qualifications to
---------------------------------------------
Obligations Under Registration Covenants. The obligations of the Company set
----------------------------------------
forth in Sections 2.1 and 2.2 hereof are subject to each of the following
limitations, conditions and qualifications:
(a) Subject to the next sentence of this paragraph, the
Company shall be entitled to postpone, for a reasonable period of time, the
filing or effectiveness of, or suspend the rights of any Holders to make sales
pursuant to, any Registration Statement otherwise required to be prepared,
8.
filed and made and kept effective by it pursuant to Section 2.1 or 2.2
thereunder; provided, however, that the duration of such postponement or
suspension may not exceed the earlier to occur of (A) 15 days after the
cessation of the circumstances described in the next sentence of this paragraph
on which such postponement or suspension is based or (B) 90 days after the date
of the determination of the Board of Directors referred to in the next sentence,
and the duration of such postponement or suspension shall be excluded from the
calculation of the six month period described in Section 2.1(b). Such
postponement or suspension may be effected only if the Board of Directors of the
Company determines reasonably and in good faith that the filing or effectiveness
of, or sales pursuant to, such Registration Statement would materially impede,
delay or interfere with any material financing, offer or sale of securities,
acquisition, corporate reorganization or other significant transaction involving
the Company or any of its Subsidiaries which material financing, offer or sale
of securities, acquisition, corporate reorganization or other significant
transaction is under active consideration at the time of such postponement or
suspension; provided, however, that the Company shall not be entitled to such
postponement or suspension more than twice in any twelve-month period. If the
Company shall so postpone the filing of a Registration Statement it shall, as
promptly as possible, deliver a certificate signed by the Chief Executive
Officer or President of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (y) have the right, in the case of
a postponement of the filing or effectiveness of a Registration Statement, upon
the affirmative vote of the Holders of not less than a majority of the
Registrable Securities to be included in such Registration Statement, to
withdraw the request for registration by giving written notice to the Company
within 10 days after receipt of such notice or (z) in the case of a suspension
of the right to make sales, receive an extension of the registration period
equal to the number of days of the suspension. Any Demand Registration as to
which the withdrawal election referred to in the preceding sentence has been
effected shall not be counted for purposes of the three Demand Registrations the
Company is required to effect pursuant to Section 2.1 hereof.
(b) The Company shall not be required by this Agreement to
file a registration statement with respect to a Demand Registration during the
period starting with the date of filing of, and within 120 days immediately
following, the effective date of any registration statement under the Securities
Act pertaining to a firmly underwritten offering of equity securities of the
Company for its own account; provided that this clause (c) shall not apply from
and after December 15, 2005.
(c) The Company shall not be required by this Agreement to
file a registration statement with respect to a Demand Registration during the
period starting with the date of notice of a proper demand for the registration
of Common Stock of the Company, pursuant to a firmly underwritten offering, for
the account of any security holder of the Company in accordance with the terms
of the contractual arrangements governing such registration, and ending at the
earlier of:
(i) the withdrawal of any such registration statement
or the request to file such registration statement by the
security holder requesting such registration; or
(ii) 90 days after the effective date of any such
registration statement;
9.
provided, however, that the Company shall not be entitled to invoke this clause
(c) more than once during any 12-month period.
(d) The Company's obligations shall be subject to the
obligations of the Selling Holders, which the Selling Holders acknowledge, to
furnish all information and materials required of such Selling Holders and to
take any and all actions required of such Selling Holders as may be required
under applicable federal and state securities laws and regulations to permit the
Company to comply with all applicable requirements of the SEC and to obtain any
acceleration of the effective date of such Registration Statement; and
(e) The Company shall not be obligated to cause any special
audit to be undertaken in connection with any registration pursuant to this
Agreement unless such audit is required by the SEC or requested by the
underwriters with respect to such registration.
Section 2.4. Restrictions on Sale by the Company and Others. The
----------------------------------------------
Company covenants and agrees that (i) it shall not, and that it shall not cause
or permit any of its subsidiaries to, effect any public sale or distribution of
any securities of the same class as any of the Registrable Securities or any
securities convertible into or exchangeable or exercisable for such securities
(or any option or other right for such securities), other than any Common Stock
and/or options, warrants or other Common Stock purchase rights, and the Common
Stock issued pursuant to such option, warrants or other rights, to employees,
officers or directors of, or consultants or advisors to the Company or any
subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Board of Directors of the Company, during
the 10-day period prior to, and during the 180-day period beginning on, the
commencement of any underwritten offering of Registrable Securities pursuant to
a Demand Registration which has been requested pursuant to this Agreement, prior
to the Company or any of its subsidiaries publicly announcing its intention to
effect any such public sale or distribution; and (ii) the Company will not, and
the Company will not cause or permit any subsidiary of the Company to, after the
date hereof, enter into any agreement or contract that conflicts with or limits
or prohibits the full and timely exercise by the Holders of Registrable
Securities of the rights herein to request a Demand Registration or to join in
any Piggy-Back Registration subject to the other terms and provisions hereof.
Section 2.5. Rule 144 and Rule 144A. The Company covenants that it
----------------------
will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the SEC thereunder in
a timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder or beneficial owner of
Registrable Securities, make available such information necessary to permit
sales pursuant to Rule 144A under the Securities Act. The Company further
covenants that it will take
10.
such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144(k) and Rule 144A under
the Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC (it being expressly
understood that the foregoing shall not create any obligation on the part of the
Company to file periodic reports or other reports under the Exchange Act at any
time that it is not then required to file such reports pursuant to the Exchange
Act). Upon the request of any Holder of Registrable Securities, the Company
will in a timely manner deliver to such Holder a written statement as to whether
it has complied with such information requirements.
Section 3. "Market Stand-Off" Agreement.
---------------------------
(a) Each Holder hereby agrees that it shall not, to the
extent requested by a managing underwriter of common stock or common equivalents
of the Company, sell or otherwise transfer or dispose of any Registrable
Securities of the Company then owned by such Holder (other than to donees or
partners of the Holder who agree to be similarly bound) for up to 180 days
following the date of the final Prospectus in connection with each Registration
Statement of the Company filed under the Securities Act; provided, however, that
such agreement (i) shall not be applicable to Registrable Securities sold
pursuant to such registration, and (ii) shall only be applicable if the managing
underwriters request such agreement from each Holder.
(b) In order to enforce the foregoing covenant, the Company
shall have the right to impose stop transfer instructions with respect to the
Registrable Securities (and the Registrable Securities of every other person
subject to the foregoing restriction) until the end of such period. The
provisions of this Section 3 shall be binding upon any transferee of any
Registrable Securities.
Section 4. Registration Procedures. In connection with the obligations of
-----------------------
the Company with respect to any Registration Statement pursuant to Sections 2.1,
2.2 and 2.5 hereof, the Company shall, except as otherwise provided:
(a) Prepare and file with the SEC as soon as practicable each
such Registration Statement (but in any event on or prior to the date of filing
thereof required under this Agreement) and cause such Registration Statement to
become effective and remain effective as provided herein; provided, however,
that before filing any such Registration Statement or any Prospectus (for
registrations pursuant to Sections 2.1 and 2.2 hereof) or any amendments or
supplements thereto (only for registrations pursuant to Section 2.1 hereof), the
Company shall make available to the Holders of the Registrable Securities
covered by such Registration Statement, and the managing underwriter or
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review and comment of such Holders and
underwriters in connection with such sale, if any, for a period of at least five
Business Days, and the Company will not file any such Registration Statement or
any amendment or supplement to any such Registration Statement (including all
such documents incorporated by reference) to which the Holders of the
Registrable Securities covered by such Registration Statement or the
underwriters in connection with such sale, if any, shall reasonably object
11.
within five Business Days after the receipt thereof. A participating Holder or
underwriter, if any, shall be deemed to have reasonably objected to such filing
if such Registration Statement, amendment or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission or fails to
comply with the applicable requirements of the Act;
(b) Prepare and file with the SEC such amendments and post-
effective amendments to the Registration Statement as may be necessary to keep
such Registration Statement continuously effective for the time periods
prescribed hereby; cause the related Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to it with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such prospectus as so
supplemented.
(c) Notify the Holders of Registrable Securities, their
counsel and the managing underwriter or underwriters, if any, promptly (but in
any event within two (2) Business Days), and confirm such notice in writing, (i)
when a Prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules and exhibits), (ii) of the issuance
by the SEC of any stop order suspending the effectiveness of such Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation or threatening of any proceedings for that purpose,
(iii) of the receipt by the Company of any notification with respect to (A) the
suspension of the qualification or exemption from qualification of the
Registration Statement or any of the Registrable Securities covered thereby for
offer or sale in any jurisdiction, or (B) the initiation of any proceeding for
such purpose, (iv) of the happening of any event, the existence of any condition
or information becoming known that requires the making of any changes in such
Registration Statement, Prospectus or documents so that, in the case of such
Registration Statement, it will conform in all material respects with the
requirements of the Securities Act and it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, not misleading, and that in
the case of the Prospectus, it will conform in all material respects with the
requirements of the Securities Act and it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (v) of the
Company's reasonable determination that a post-effective amendment to such
Registration Statement would be appropriate.
(d) Use commercially reasonable efforts to prevent the
issuance of any order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the Registrable
Securities covered thereby for sale in any jurisdiction, and, if any such order
is issued, to obtain the withdrawal of any such order at the earliest
practicable moment.
12.
(e) If requested by the managing underwriter or underwriters,
if any, or the Holders of a majority of the Registrable Securities being sold in
connection with an underwritten offering (only for registrations pursuant to
Section 2.1 hereof), (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters, if any, or such Holders reasonably request to be included therein
to comply with applicable law, (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
prospectus supplement or post effective amendment, and (iii) supplement or make
amendments to such Registration Statement.
(f) Furnish to each Holder of Registrable Securities who so
requests and to counsel for the Holders of Registrable Securities and each
managing underwriter, if any, without charge, upon request, one conformed copy
of the Registration Statement and each post effective amendment thereto,
including financial statements and schedules, and of all documents incorporated
or deemed to be incorporated therein by reference and all exhibits (including
exhibits incorporated by reference).
(g) Deliver to each Holder of Registrable Securities, their
counsel and each underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request; and, subject to the last
paragraph of this Section 4, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the Holders of
Registrable Securities and the underwriter or underwriters or agents, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, to
register or qualify, and cooperate with the Holders of Registrable Securities,
the underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of, such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as the managing underwriter or underwriters reasonably request in
writing, or, in the event of a non-underwritten offering, as the Holders of a
majority of the Registrable Securities may request; provided, however, that
where Registrable Securities are offered other than through an underwritten
offering, the Company agrees to cause its counsel to perform Blue Sky
investigations and file registrations and qualifications required to be filed
pursuant to this Section 4(h); keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and do any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the securities covered thereby; provided, however, that
the Company will not be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) become subject to taxation in any jurisdiction where
it is not then so subject.
(i) Cooperate with the Holders of Registrable Securities
and the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates
13.
representing Registrable Securities to be sold, which certificates shall not
bear any restrictive legends whatsoever and shall be in a form eligible for
deposit with The Depository Trust Company ("DTC"); and enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or Holders may reasonably request
at least two business days prior to any sale of Registrable Securities in a firm
commitment underwritten public offering.
(j) Pay all Registration Expenses in connection with the
registrations requested pursuant to Sections 2.1 and 2.2 hereof. Each Holder of
Registrable Securities shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a Registration Statement requested pursuant
to Section 2.1.
(k) Upon the occurrence of any event contemplated by
Section 4(c)(iv) or 4(c)(v) above, as promptly as practicable prepare a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and, subject to Section 4(a) hereof, file
such with the SEC so that, as thereafter delivered to the purchasers of
Registrable Securities being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(l) Prior to the effective date of a Registration
Statement, (i) provide the registrar for the Registrable Securities with
certificates for such securities in a form eligible for deposit with DTC and
(ii) provide a CUSIP number for such securities.
(m) If the Company determines to conduct any offering
provided for herein by meaning of an underwriting, enter into an underwriting
agreement in form, scope and substance as is customary in underwritten offerings
and take all such other actions as are reasonably requested by the managing
underwriter or underwriters in order to expedite or facilitate the registration
or disposition of such Registrable Securities in any underwritten offering to be
made of the Registrable Securities in accordance with this Agreement, and in
such connection, (i) make such representations and warranties to the underwriter
or underwriters, with respect to the business of the Company and the
subsidiaries of the Company, and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings, and confirm the same if and
when requested; (ii) use reasonable efforts to obtain an opinion of counsel to
the Company, addressed to the underwriter or underwriters covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by underwriters; (iii) use
reasonable efforts to obtain "cold comfort" letters from the independent
certified public accountants of the Company (and, if applicable, the
subsidiaries of the Company) and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement, addressed to each of the
underwriters, such letters to be in customary form and covering matters of the
14.
type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by the
managing underwriter or underwriters and as permitted by the Statement of
Auditing Standards No. 72; and (iv) if an underwriting agreement is entered
into, the same shall contain customary indemnification provisions and procedures
with respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder.
(n) Make available for inspection by a representative of
the Holders of Registrable Securities being sold, any underwriter participating
in any such disposition of Registrable Securities, if any, and any attorney or
accountant retained by such representative of the Holders or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, at the Inspector's expense, all financial and other
records, pertinent corporate documents and properties of the Company and the
subsidiaries of the Company as reasonably requested by the Inspector, and cause
the officers, directors and employees of the Company and the subsidiaries of the
Company to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement; provided, however,
that all such information shall be kept confidential by such Inspector and shall
not be used for any purpose other than as contemplated hereby, except to the
extent that (i) the disclosure of such information is necessary or advisable to
avoid or correct a misstatement or omission in the Registration Statement or in
any Prospectus; provided however, that prior notice is given to the Company, and
the Company's legal counsel and such Holder's legal counsel concur that
disclosure is required, (ii) the release of such information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction, (iii)
disclosure of such information is necessary or advisable in connection with any
action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Inspector and arising out of, based upon, relating to
or involving this Agreement or any of the transactions contemplated hereby or
arising thereunder; provided, however, that prior notice shall be provided as
soon as practicable to the Company of the potential disclosure of any
information by such Inspector pursuant to clauses (ii) or (iii) of this sentence
to permit the Company to obtain a protective order (or waive the provisions of
this paragraph (n)) and that such Inspector shall take all actions as are
reasonably necessary to protect the confidentiality of such information (if
practicable) to the extent such action is otherwise not inconsistent with, an
impairment of or in derogation of the rights and interests of the Holder or any
Inspector, or (iv) such information has been made generally available to the
public.
(o) Comply with all applicable rules and regulations of the
SEC and make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than forty-five (45) days after the end of any 12-month period (or ninety (90)
days after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities are
sold to an underwriter or to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to an underwriter or to underwriters
in such an offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of the relevant Registration Statement,
which statements shall cover said 12-month periods.
15.
(p) Use its best efforts to cause all Registrable
Securities relating to such Registration Statement to be listed on each
securities exchange, if any, on which similar securities issued by the Company
are then listed.
(q) Cooperate with the Selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends and registered in such names as the Selling Holders may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities.
Each seller of Registrable Securities as to which any registration is being
effected agrees, as a condition to the registration obligations with respect to
such seller provided herein, to furnish to the Company such information
regarding such seller and the distribution of such Registrable Securities as the
Company may, from time to time, reasonably request in writing to comply with the
Securities Act and other applicable law. The Company may exclude from such
registration the Registrable Securities of any seller for so long as such seller
fails to furnish such information within a reasonable time after receiving such
request. If the identity of a seller of Registrable Securities is to be
disclosed in the Registration Statement, such seller shall be permitted to
include all information regarding such seller as it shall reasonably request.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii),
4(c)(iv), or 4(c)(v) hereof, such Holder will forthwith discontinue disposition
of such Registrable Securities covered by the Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(k) hereof, or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed, and has received copies of any amendments or
supplements thereto, and, if so directed by the Company, such Holder will, at
the Company's expense, deliver to the Company all copies, other than permanent
file copies, then in such Holder's actual possession of the Prospectus covering
such Registrable Securities current at the time of receipt of such notice;
provided, however, that nothing herein shall create any obligation on the part
of any Holder to undertake unreasonable efforts to retrieve or return any such
Prospectus not within the actual possession or control of such Holder. In the
event the Company shall give any such notice, the period of time for which a
Registration Statement is required thereunder to be effective shall be extended
by the number of days during such periods from and including the date of the
giving of such notice to and including the date when each seller of Registrable
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 4(k)
hereof or (y) the Advice.
Section 5. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each
Holder and each Person, if any, who controls such Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, or is
under common control with, or is controlled by, such Holder, from and against
all losses, claims, damages and liabilities (including, without limitation, and
16.
subject to clause (c) of this Section 5 below, the reasonable legal fees and
other reasonable out-of-pocket expenses actually incurred by any Holder or any
such controlling or affiliated Person in connection with any suit, action or
proceeding or any claim asserted), caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act, or caused by any omission
or alleged omission to state in any such Registration Statement a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or caused by any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state in
any such preliminary prospectus or Prospectus a material fact required to be
stated in any such preliminary prospectus or Prospectus or necessary to make the
statements in any such preliminary prospectus or Prospectus in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Holder furnished to the Company in
writing by such Holder expressly for use in any such Registration Statement or
Prospectus; provided, however, that the Company shall not be required to
indemnify any such Person if such untrue statement or omission or alleged untrue
statement or omission was contained or made in any preliminary prospectus and
corrected in the Prospectus, or any amendment or supplement thereto and the
Prospectus does not contain any other untrue statement or omission or alleged
untrue statement or omission of a material fact that was the subject matter of
the related proceeding and any such loss, liability, claim, damage or expense
suffered or incurred by such indemnified Person resulted from any action, claim
or suit by any Person who purchased Registrable Securities which are the subject
thereof from such indemnified Person and it is established in the related
proceeding that such indemnified Person failed to deliver or provide a copy of
the Prospectus (as amended or supplemented) to such Person with or prior to the
confirmation of the sale of such Registrable Securities sold to such Person if
required by applicable law, unless such failure to deliver or provide a copy of
the Prospectus (as amended or supplemented) was a result of noncompliance by the
Company with Section 4 hereof or as a result of the failure of the Company to
provide such Prospectus.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
any Registration Statement, and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Holder, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto). The liability of any Holder under this
paragraph shall in no event exceed the proceeds received by such Holder from
sales of Registrable Securities giving rise to such obligations.
(c) In case any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
either paragraph (a) or (b) above, such Person (the "indemnified
17.
party") shall promptly notify the Person against which such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may reasonably designate in such proceeding and shall pay the
reasonable fees and expenses actually incurred of such counsel relating to such
proceeding; provided, however, that the failure to so notify the indemnifying
party shall not relieve it of any obligation or liability which it may have
thereunder or otherwise unless the indemnifying party has been materially
prejudiced by such failure. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
contrary, (ii) the indemnifying party shall have failed to retain within a
reasonable period of time counsel reasonably satisfactory to such indemnified
party or parties or (iii) the named parties to any such proceeding (including
any impleaded parties) include both such indemnified party or parties and the
indemnifying parties or any affiliate of the indemnifying parties or such
indemnified parties and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between the
indemnifying party or parties and the indemnified party or parties. It is
understood that the indemnifying parties shall not, in connection with any one
such proceeding or separate but substantially similar or related proceedings in
the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for such
indemnified party or parties and that all such fees and expenses shall be
reimbursed within reasonable time of the request after the incurrence thereof.
Any such separate firm for the Holders and such control Persons of the Holders
shall be designated in writing by Holders who sold a majority in interest of
Registrable Securities sold by all such Holders and shall be reasonably
acceptable to the Company and any such separate firm for the Company, its
directors, its officers and such control Persons of the Company shall be
designated in writing by the Company. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its prior written consent
(which consent shall not be unreasonably withheld or delayed) but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify and hold harmless the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement or compliance of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party, or indemnity could
have been sought thereunder by such indemnified party, unless such settlement or
compliance involves only the payment of money damages that are actually paid by
the indemnifying party or includes an unconditional written release of such
indemnified party in form and substance reasonably satisfactory to such
indemnified party of such indemnified party from all liability or claims that
are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 5 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder and in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable by
such indemnified party as a result of such
18.
losses, claims, damages or liabilities in such proportion as is appropriate to
reflect (i) the relative benefits received by the Company on the one hand and
the Holders on the other hand from the offering of such Registrable Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the Company on the one hand and the Holders on the other hand in connection with
the statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Holders on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of discounts and commissions but before deducting expenses) of the Warrants sold
pursuant to the Purchase Agreement received by the Company bears to the total
proceeds received by such Holder from the sale of Registrable Securities, as the
case may be. The relative fault of the Company on the one hand and the Holders
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances.
(e) The Company and each Holder agree that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 5(d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 5(d) above shall be
deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, in no event shall a Holder be
required to contribute any amount in excess of the amount by which proceeds
received by such Holder from sales of Registrable Securities exceeds the amount
of any damages that such Holder has otherwise been required to pay or has paid
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 5 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
(f) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 5 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Holder or any person who controls a
Holder, the Company, their respective directors or officers or any person
controlling the Company and (ii) any termination of this Agreement.
19.
Section 6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company represents and
--------------------------
warrants to the Holders that it has not entered into nor will the Company on or
after the date of this Agreement enter into, or cause or permit any of its
subsidiaries to enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
thereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's other issued and outstanding
securities, if any, under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement
----------------------
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the Company
consents and the Company has obtained the prior written consent of Holders of
not less than a majority in number of the then outstanding Warrants and
Registrable Securities not resold to the public for the purpose of adding any
provision to or changing in any manner or eliminating any of the provisions of
this Agreement or modifying in any manner the rights of the Holders of the
outstanding Warrants; provided, however, that Section 5 hereof and this Section
6(b) may not be amended, modified or supplemented without the prior written
consent of each Holder (including any Person who was a Holder of Registrable
Securities disposed of pursuant to any Registration Statement) affected by such
amendment, modification or supplement. Notwithstanding the foregoing, a waiver
or consent to departure from the provisions hereof that relates exclusively to
the rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Registrable
Securities may be given the Company and by the Holders of not less than a
majority of the Registrable Securities proposed to be sold by such Holders
pursuant to such Registration Statement.
(c) Notices. All notices and other communications provided
-------
for or permitted thereunder shall be made in writing by hand delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery, (i) if to a Holder, at the most current address of Holder as
set forth in the register for the Warrants or the Warrant Shares, which address
initially is, with respect to the Initial Purchasers, the address set forth in
the Purchase Agreement; and (ii) if to the Company, initially at the address set
forth below the Company's name on the signature pages hereto and thereafter at
such other address, notice of which is given in accordance with the provisions
of this Section 6(c).
A copy of all notices and other communications under this Section 6(c)
shall be delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
20.
(d) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Warrants and/or Registrable Securities, in any manner, whether by
operation of law or otherwise, such Warrants and/or Registrable Securities shall
be held subject to all of the terms of this Agreement, and by taking and holding
such Warrants and/or Registrable Securities such Person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such Person shall be entitled to receive the
benefits hereof.
(e) Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
---------------------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Each of the parties hereto hereby irrevocably and unconditionally: (i)
submits itself and its property in any legal action or proceeding relating to
this Warrant Registration Rights Agreement or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive jurisdiction of the courts
of the State of New York and the courts of the United States of America for the
Southern District of New York, and appellate courts thereof, and consents and
agrees to such action or proceeding being brought in such courts; and (ii)
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in any inconvenient court and agrees not to plead or claim the same.
(h) Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the
----------------
Purchase Agreement and the Warrant Agreement is intended by the parties as a
final expression of their
21.
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. This Agreement, the Purchase Agreement and
the Warrant Agreement supersede all prior agreements and understandings between
the parties with respect to such subject matter.
(j) Attorneys' Fees. As between the parties to this Agreement,
---------------
in any action or proceeding brought to enforce any provision of this Agreement,
or where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to its
costs and expenses and any other available remedy.
(k) Securities Held by the Company or Its Affiliates. Whenever
------------------------------------------------
the consent or approval of Holders of a specified percentage of Registrable
Securities or Warrants is required thereunder, Registrable Securities or
Warrants held by the Company or by any of its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted (in either
the numerator or the denominator) in determining whether such consent or
approval was given by the Holders of such required percentage.
(l) Remedies. In the event of a breach by the Company of any
--------
of its obligations under this Agreement, each Holder, in addition to being
entitled to exercise all rights provided herein, in the Purchase Agreement or
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement.
[signature page follows]
22.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CONCENTRIC NETWORK CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
Address for Notices:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
UBS SECURITIES LLC
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
WHEAT, FIRST SECURITIES, INC.
By UBS SECURITIES LLC
By: /s/ UBS Securities LLC
___________________________________
Name:
Title:
By: /s/ UBS Securities LLC
___________________________________
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇