EXHIBIT 10.69
REGISTRATION RIGHTS AGREEMENT
by and between
ASC HOLDINGS, INC.
and
▇▇▇▇▇▇▇▇▇ L.L.C.
Dated as of July 2, 1997
REGISTRATION RIGHTS AGREEMENT (this or the "Agreement") dated as of
July 2, 1997, by ASC Holdings, Inc., a Maine corporation (the "Company"), and
▇▇▇▇▇▇▇▇▇ L.L.C. (the "Initial Holder").
W I T N E S S E T H :
WHEREAS, simultaneously herewith, the Company and the Initial Holder
are entering into a Securities Purchase Agreement (its "Purchase Agreement"),
pursuant to which the Company is issuing, and the Initial Holder is purchasing,
certain securities of the Company; and
WHEREAS, in order to induce the Initial Holder to enter into the
Purchase Agreement, the Company and its Subsidiaries have agreed to provide
certain registration rights on the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:
"Acquiring Person" has the meaning specified in the Purchase
Agreement.
"Affiliate" shall mean with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Certificate of Designation" shall mean the Certificate of
Designation, Number, Voting Powers, Preferences and Rights of the Preferred
Stock of the Company and Rights of the Convertible Preferred Stock, as filed
with the Secretary of State of the State of Maine.
"Change of Control" shall have the meaning set forth in the Purchase
Agreement.
"Common Shares" shall mean shares of Common Stock, of an IPO Entity.
"Common Stock" shall mean the class of Common Stock to be issued to
the public, as such Common Stock may be constituted from time to time.
"Company" shall have the meaning set forth in the preamble.
"Conversion Shares" shall mean the Common Shares or other equity
securities issued or issuable upon conversion of the Convertible Securities.
"Convertible Securities" shall mean the Notes, Preferred Stock and
Repriced Converts.
"Demand Registration" shall mean a registration required to be
effected by an IPO Entity pursuant to Section 2.1.
"Demand Registration Statement" shall mean a registration statement
of an IPO Entity which covers the Registrable Securities requested to be
included therein pursuant to the provisions of Section 2.1 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
similar or successor statute.
"Holders" shall mean the Initial Holder for so long as it owns any
Registrable Securities and such of its respective heirs, successors and
permitted assigns (including any permitted transferees of Registrable
Securities) who acquire or are otherwise the transferee of Registrable
Securities, directly or indirectly, from such Initial Holder (or any subsequent
Holder), for so long as such heirs, successors and permitted assigns own any
Registrable Securities. For purposes of this Agreement, a Person will be deemed
to be a Holder whenever such Person holds an option to purchase, or a security
convertible into or exercisable or exchangeable for, Registrable Securities,
whether or not such purchase, conversion, exercise or exchange has actually been
effected and disregarding any legal restrictions upon the exercise of such
rights. Registrable Securities issuable upon exercise of an option or upon
conversion, exchange or exercise of another security shall be deemed outstanding
for the purposes of this Agreement.
"Holders' Counsel" shall mean one firm of counsel (per registration)
to the Holders of Registrable Securities participating in such registration,
which counsel shall be selected (i) in the case of a Demand Registration or an
S-3 Registration, by the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested in the Request, and
(ii) in all other cases, by the Majority Holders of the Registration.
-2-
"Incidental Registration" shall mean a registration required to be
effected by the Company pursuant to Section 2.2.
"Incidental Registration Statement" shall mean a registration
statement of an IPO Entity which covers the Registrable Securities requested to
be included therein pursuant to the provisions of Section 2.2 and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference (or deemed to be
incorporated by reference) therein.
"Initial Holder" shall mean [▇▇▇▇▇▇▇▇▇ L.L.C.].
"Initial Public Offering" has the meaning specified in the Purchase
Agreement.
"Initiating Holders" shall mean, with respect to a particular
registration, the Holders who initiated the Request for Registration.
"Inspectors" shall have the meaning set forth in Section 4.1(g).
"IPO Entity" has the meaning specified in the Purchase Agreement.
"Majority Holders" shall mean one or more Holders of Registrable
Securities who would hold a majority of the Registrable Securities then
outstanding.
"Majority Holders of the Registration" shall mean, with respect to a
particular registration, one or more Holders of Registrable Securities who would
hold a majority of the Registrable Securities to be included in such
registration.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Notes" shall have the meaning set forth in the Purchase Agreement.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
any other entity or organization, including a government or agency or political
subdivision thereof (including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business), and shall include any successor (by merger or otherwise) of such
entity.
"Preferred Stock" shall have the meaning set forth in the Purchase
Agreement.
"Prospectus" shall mean the prospectus included in a Registration
Statement (including, without limitation, any preliminary prospectus and any
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
-3-
Securities Act), and any such Prospectus as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to such
Prospectus, including post-effective amendments, and in each case including all
material incorporated by reference (or deemed to be incorporated by reference)
therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean (i) any Conversion Shares issued
or issuable upon conversion of the Convertible Securities issued to the Initial
Holder pursuant to the Purchase Agreement, (ii) Repriced Converts, and (iii) any
other securities of an IPO Entity (or any successor or assign of the IPO Entity,
whether by merger, consolidation, sale of assets or otherwise) which may be
issued or issuable with respect to, in exchange for, or in substitution of,
Registrable Securities referenced in clauses (i) and (ii) above by reason of any
dividend or stock split, combination of shares, merger, consolidation,
recapitalization, reclassification, reorganization, sale of assets or similar
transaction. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (A) a registration statement with
respect to the sale of such securities shall have been declared effective under
the Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (B) such securities are sold pursuant to Rule
144 (or any similar provisions then in force) under the Securities Act, (C) such
securities have been otherwise transferred, a new certificate or other evidence
of ownership for them not bearing the legend restricting further transfer shall
have been delivered by the relevant IPO Entity and subsequent public
distribution of them shall not require registration under the Securities Act,
(D) such securities shall have ceased to be outstanding or (E) such securities
are freely tradable under the Securities Act. A Holder of Convertible Securities
shall be deemed to be a holder of Registrable Securities unless the right to
exchange such Convertible Securities into Registrable Securities shall have
terminated pursuant to Section 6.15 or 8.1 of the Purchase Agreement.
"Registration Expenses" shall mean any and all expenses incident to
the performance of or compliance with this Agreement by each IPO Entity,
including, without limitation (i) all SEC, stock exchange, NASD and other
registration, listing and filing fees, (ii) all fees and expenses incurred in
connection with compliance with state securities or blue sky laws and compliance
with the rules of any stock exchange (including fees and disbursements of
counsel in connection with such compliance and the preparation of a blue sky
memorandum and legal investment survey), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing, distributing,
mailing and delivering any Registration Statement, any Prospectus, any
underwriting agreements, transmittal letters, securities sales agreements,
securities certificates and other documents relating to the performance of or
compliance with this Agreement, (iv) the fees and disbursements of counsel for
the IPO Entity, (v) the fees and disbursements of Holders' Counsel, (vi) the
fees and disbursements of all independent public accountants (including the
expenses of any audit and/or "cold comfort" letters) and the fees and expenses
of other Persons, including experts, retained by an IPO Entity, (vii) the
-4-
expenses incurred in connection with making road show presentations and holding
meetings with potential investors to facilitate the distribution and sale of
Registrable Securities which are customarily borne by the issuer, (viii) any
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities, (ix) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities
being registered and (x) discounts and commissions payable to underwriters,
selling brokers, dealer managers or other similar Persons engaged in the
distribution of any of the Registrable Securities; provided, however, that in
any case where Registration Expenses are not to be borne by an IPO Entity, such
expenses shall not include salaries of such IPO Entity's personnel or general
overhead expenses of such IPO Entity, auditing fees, premiums or other expenses
relating to liability insurance required by underwriters of such IPO Entity or
other expenses for the preparation of financial statements or other data
normally prepared by such IPO Entity in the ordinary course of its business or
which such IPO Entity would have incurred in any event; and provided, further,
that in the event such IPO Entity shall, in accordance with Section 2.2 or
Section 2.6 hereof, not register any securities with respect to which it had
given written notice of its intention to register to Holders, notwithstanding
anything to the contrary in the foregoing, all of the costs incurred by the
Holders in connection with such registration shall be deemed to be Registration
Expenses.
"Registration Statement" shall mean any registration statement of an
IPO Entity which covers any Registrable Securities 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 (or deemed to be
incorporated by reference) therein.
"Repriced Converts" shall have the meaning set forth in the Purchase
Agreement.
"Request" shall have the meaning set forth in Section 2.1(a).
"S-3 Registration" shall mean a registration required to be effected
by the Company pursuant to Section 2.3(a).
"SEC" shall mean the Securities and Exchange Commission, or any
successor agency having jurisdiction to enforce the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any similar or
successor statute.
"Shelf Registration" shall have the meaning set forth in Section
2.1(a).
"Underwriters" shall mean the underwriters, if any, of the offering
being registered under the Securities Act.
-5-
"Underwritten Offering" shall mean a sale of securities of an IPO
Entity to an Underwriter or Underwriters for reoffering to the public.
"Withdrawn Demand Registration" shall have the meaning set forth in
Section 2.1(a).
"Withdrawn Request" shall have the meaning set forth in Section
2.1(a).
2. REGISTRATION UNDER THE SECURITIES ACT.
2.1 Demand Registrations.
(a) In the event that any Holder shall receive an Offering Notice in
accordance with Section 8.1 of the Purchase Agreement, an Offering Notice in
accordance with Section 2.3(b)(ii) of the Purchase Agreement or a Change of
Control Offer in which Conversion Shares or Repriced Converts of a Designated
Acquiring Person that is a Public Company are being offered to the Holders in
accordance with Section 6.15(a)(ii), then the IPO Entity or Designated Acquiring
Person either, as elected by the Holders of the Majority of Registrable
Securities, (i) include all of the Repriced Converts and Conversion Shares in
the IPO of the IPO Entity or Designated Acquiring Entity as an Incidental
Registration in accordance with the provisions of Section 2.2 hereof, or (ii)
cause the registration of all of the Repriced Converts and Conversion Shares in
a registration by the IPO Entity or Designated Acquiring Entity separate from
the registration of the IPO as a Demand Registration in accordance with the
provisions of Section 2.1(b) hereof, such Demand Registration to become
effective at the same time as the date on which the IPO of the IPO Entity or
Designated Acquiring Person, or the Change of Control, as the case may be, is
consummated.
(b) (i) In connection with a Demand Registration contemplated by
Section 2.1(a) or (ii) in the event that, in their sole discretion, the Holders
have consented to receiving on the closing date of the IPO or Change of Control
Conversion Shares or Repriced Converts (including Conversion Shares issuable
upon conversion thereof) that are registered and freely tradable under the
Securities Act, the Holders shall have the right to request in writing that an
IPO Entity register all or part of such Holders' Registrable Securities (a
"Request") (which Request shall specify the amount of Registrable Securities
intended to be disposed of by such Holders and the intended method of
disposition thereof) by filing with the SEC a Demand Registration Statement. As
promptly as practicable, but no later than 10 days after receipt of a Request,
the relevant IPO Entity shall give written notice of such requested registration
to all Holders of Registrable Securities. Subject to Section 2.1(b), the
relevant IPO Entity shall include in a Demand Registration (i) the Registrable
Securities intended to be disposed of by the Initiating Holders and (ii) the
Registrable Securities intended to be disposed of by any other Holder which
shall have made a written request (which request shall specify the amount of
Registrable Securities to be registered and the intended method of disposition
thereof) to the relevant IPO Entity for inclusion thereof in such registration
within 20 days after the receipt of such written notice from such IPO Entity.
The IPO Entity
-6-
shall, as expeditiously as possible following a Request, cause to be filed with
the SEC a Demand Registration Statement providing for the registration under the
Securities Act of the Registrable Securities which the relevant IPO Entity has
been so requested to register by all such Holders, to the extent necessary to
permit the disposition of such Registrable Securities so to be registered in
accordance with the intended methods of disposition thereof specified in such
Request or further requests (including, without limitation, by means of a shelf
registration pursuant to Rule 415 under the Securities Act (a "Shelf
Registration") if so requested and if such IPO Entity is then eligible to use
such a registration). The Company shall cause such Demand Registration Statement
to be declared effective by the SEC as soon as practicable thereafter and to
keep such Demand Registration Statement continuously effective for the period
specified in Section 3.1(b).
Notwithstanding anything contained herein to the contrary
pursuant to clause (ii) of Section 2.1(b), if a Request is made within 90 days
of the effective date (the "Applicable Effective Date") of a Registration
Statement for an Initial Public Offering, the Company shall cause the applicable
Demand Registration Statement to be declared effective (and the associated
offering to be consummated), at the earliest possible time, and as soon as
market conditions permit, but no later than six months following the Applicable
Effective Date.
A Request may be withdrawn prior to the filing of the Demand
Registration Statement by the Majority Holders of the Registration (a "Withdrawn
Request") and a Demand Registration Statement may be withdrawn prior to the
effectiveness thereof by the Majority Holders of the Registration (a "Withdrawn
Demand Registration"), and such withdrawals shall be treated as a Demand
Registration which shall have been effected pursuant to this Section 2.1, unless
the Holders of Registrable Securities to be included in such Registration
Statement reimburse the Company for its reasonable out-of-pocket Registration
Expenses relating to the preparation and filing of such Demand Registration
Statement (to the extent actually incurred); provided, however, that if a
Withdrawn Request or Withdrawn Registration Statement is made (A) because of a
material adverse change in the business, financial condition or prospects of the
relevant IPO Entity or (B) because the sole or lead managing Underwriter advises
that the amount of Registrable Securities to be sold in such offering be reduced
pursuant to Section 2.1(b) by more than 15% of the Registrable Securities to be
included in such Registration Statement, then such withdrawal shall not be
treated as a Demand Registration effected pursuant to this Section 2.1 and such
IPO Entity shall pay all Registration Expenses in connection therewith. Any
Holder requesting inclusion in a Demand Registration may, at any time prior to
the effective date of the Demand Registration Statement (and for any reason)
revoke such request by delivering written notice to such IPO Entity revoking
such requested inclusion.
(c) Priority in Demand Registrations. If a Demand Registration
involves an Underwritten Offering, and the sole or lead managing Underwriter, as
the case may be, of such Underwritten Offering shall advise the relevant IPO
Entity in writing (with a copy to each Holder requesting registration) on or
before the date five
-7-
days prior to the date then scheduled for such offering that, in its opinion,
the amount of Registrable Securities requested to be included in such Demand
Registration exceeds the number which can be sold in such offering within a
price range acceptable to the Majority Holders of the Registration (such writing
to state the basis of such opinion and the approximate number of Registrable
Securities which may be included in such offering) such IPO Entity shall include
in such Demand Registration, to the extent of the number which the Company is so
advised may be included in such offering or separate registration, the
Registrable Securities requested to be included in the Demand Registration by
the Holders allocated pro rata in proportion to the number of Registrable
Securities requested to be included in such Demand Registration by each of them.
In the event the IPO Entity shall not, by virtue of this Section 2.1(b), include
in any Demand Registration all of the Registrable Securities of any Holder
requesting to be included in such Demand Registration, such Holder may, upon
written notice to such IPO Entity given within five days of the time such Holder
first is notified of such matter, reduce the amount of Registrable Securities it
desires to have included in such Demand Registration, whereupon only the
Registrable Securities, if any, it desires to have included will be so included
and the Holders not so reducing shall be entitled to a corresponding increase in
the amount of Registrable Securities to be included in such Demand Registration.
(d) Underwriting; Selection of Underwriters. If the Initiating
Holders holding a majority of the Registrable Securities for which registration
was requested in the Request so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
Underwritten Offering in customary form; and such Initiating Holders may require
that all Persons (including other Holders) participating in such registration
sell their Registrable Securities to the Underwriters at the same price and on
the same terms of underwriting applicable to the Initiating Holders. If any
Demand Registration involves an Underwritten Offering, the sole or managing
Underwriters and any additional investment bankers and managers to be used in
connection with such registration shall be selected by the IPO Entity, subject
to the approval of the Holders of a majority of the Registrable Securities for
which registration was requested in the Request (such approval not to be
unreasonably withheld). If any Demand Registration is being requested
concurrently with the IPO or other offering by the Company and such registration
is for an Underwritten Offering, the sole or managing Underwriters for such
registration shall be the same as selected by the Company for the registration
of the IPO or such offering.
(e) Registration of Other Securities. Whenever an IPO Entity shall
effect a Demand Registration, no securities other than the Registrable
Securities shall be covered by such registration unless the Majority Holders of
the Registration shall have consented in writing to the inclusion of such other
securities.
(f) Effective Registration Statement; Suspension. A Demand
Registration Statement shall not be deemed to have become effective (and the
related registration will not be deemed to have been effected) (i) unless it has
been declared effective by the SEC and remains effective in compliance with the
provisions of the
-8-
Securities Act with respect to the disposition of all Registrable Securities
covered by such Demand Registration Statement for the time period specified in
Section 3.1(b), (ii) if the offering of any Registrable Securities pursuant to
such Demand Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, or (iii) if, in the case of an Underwritten Offering, the
conditions to closing specified in an underwriting agreement to which an IPO
Entity is a party are not satisfied other than by the sole reason of any breach
or failure by the Holders of Registrable Securities or are not otherwise waived.
(g) Other Registrations. During the period (i) beginning on the date
of a Request for an Underwriting Offering and (ii) ending on the date that is 90
days after the date that a Demand Registration Statement filed pursuant to such
Request has been declared effective by the SEC (or ending on such earlier date
as the Holders shall have withdrawn such Request or such Demand Registration
Statement), the relevant IPO Entity shall not, without the consent of the
Majority Holders of the Registration, file a registration statement pertaining
to any other securities of such IPO Entity.
(h) Registration Statement Form. Registrations under this Section
2.1 shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Request, and (ii) which
shall be available for the sale of Registrable Securities in accordance with the
intended method or methods of disposition specified in the requests for
registration. Each IPO Entity shall include in any such Registration Statement,
in addition to such information as the IPO Entity may desire, all additional
information which any selling Holder, upon advice of counsel, shall reasonably
request.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If any IPO Entity at
any time, or from time to time, proposes to engage in an Initial Public Offering
or any subsequent public offering of its securities (other than on Form S-8 or
S-4) while this Agreement is in effect, such IPO Entity shall deliver prompt
written notice (which notice shall be given at least 45 days prior to such
proposed registration) to all Holders of Registrable Securities of such IPO
Entity's intention to undertake such Offering, describing in reasonable detail
the proposed registration and distribution (including in the case of an Initial
Public Offering the anticipated range of the proposed offering price, the
breadth of which shall not exceed 10% of the lowest price of the estimated
range, and the case of all registrations, the class and number of securities
proposed to be registered and the distribution arrangements) and of such
Holders' right to participate in such registration under this Section 2.2 as
hereinafter provided. Subject to the other provisions of this paragraph (a) and
Section 2.2(b), upon the written request of any Holder made within 20 days after
the receipt of such written notice (which request shall specify the amount of
Registrable Securities to be registered (based on the estimated range) and the
intended method of disposition thereof), the Company shall effect the
registration under the Securities Act of all Registrable Securities requested by
Holders to be so registered
-9-
(an "Incidental Registration"), to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered, by inclusion of such Registrable
Securities in the Registration Statement which covers the securities which the
relevant IPO Entity proposes to register and shall cause such Registration
Statement to become and remain effective with respect to such Registrable
Securities in accordance with the registration procedures set forth in Section
3. Immediately upon notification to the relevant IPO Entity from the Underwriter
of the price at which such securities are to be sold, such IPO Entity shall so
advise each participating Holder. If in the case of an Initial Public Offering
such price differs from the high or low end of the estimated price range by more
than 10%, the Holders requesting inclusion in an Incidental Registration may, at
any time prior to the effective date of the Incidental Registration Statement,
revoke or change such request by delivering written notice to such IPO Entity
revoking or changing (specifying such change in reasonable detail) such
requested inclusion within such reasonable time period as may be required by the
Underwriter.
(b) Priority in Incidental Registration. If the sole or the lead
managing Underwriter, as the case may be, shall advise the relevant IPO Entity
in writing (with a copy to each Holder requesting registration) on or before the
date five days prior to the date then scheduled for such offering that, in its
opinion, the amount of securities (including Registrable Securities) requested
to be included in such registration exceeds the amount which can be sold in such
offering without materially interfering with the successful marketing of the
securities being offered (such writing to state the basis of such opinion and
the approximate number of such securities which may be included in such offering
without such effect), such IPO Entity shall include in such registration, to the
extent of the number which it is so advised may be included in such offering
without such effect, (i) in the case of a registration initiated by such Entity,
(A) first, the securities that such IPO Entity proposes to register for its own
account, (B) second, the Registrable Securities requested to be included in such
registration by the Holders, allocated pro rata in proportion to the number of
Registrable Securities requested to be included in such registration by each of
them, and (C) third, other securities of such IPO Entity to be registered on
behalf of any other Person, and (ii) in the case of a registration initiated by
a Person other than such IPO Entity, (A) first, the Registrable Securities
requested to be included in such registration by the Holders, allocated pro rata
in proportion to the number of securities requested to be included in such
registration by each of them, (B) second, the Registrable Securities requested
to be included in such registration by any Persons initiating such registration,
allocated pro rata in proportion to the number of securities requested to be
included in such registration by each of them, (C) third, the securities that
such IPO Entity proposes to register for its own account, and (D) fourth, other
securities of such IPO Entity to be registered on behalf of any other Person;
provided, however, that in the event such IPO Entity will not, by virtue of this
Section 2.2(b), include in any such registration all of the Registrable
Securities of any Holder requested to be included in such registration, such
Holder may, upon written notice to such IPO Entity given within three days of
the time such Holder first is notified of such matter, reduce the amount of
Registrable Securities it desires to have included in such
-10-
registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such registration. In addition, to the extent that an Initial
Holder is not permitted to register all of its Registrable Securities in such
registration, the relevant IPO Entity shall register the balance of such
Registrable Securities pursuant to the terms of this Agreement, which
registration shall be filed as soon as practicable thereafter and which the
relevant IPO Entity shall cause to become effective no later than the six month
anniversary of the Applicable Effective Date.
(c) Selection of Underwriters. The sole or managing Underwriter(s)
and any additional investment bankers and managers to be used in connection with
an IPO shall be selected by the IPO Entity, subject to the approval of the
Majority Holders of the Registration (such approval not to be unreasonably
withheld).
2.3 S-3 Registration; Shelf Registration
(a) S-3 Registration. If, at any time, an IPO Entity's Initial
Public Offering with respect to which the Holders have not been permitted to
register all of their Registrable Securities pursuant to Section 2.1(a), (i) one
or more Holders of Registrable Securities representing 25% or more of the
Registrable Securities then outstanding request that an IPO Entity file a
registration statement on Form S-3 or any successor form thereto for a public
offering of all or any portion of the shares of Registrable Securities held by
such Holder or Holders, the reasonably anticipated aggregate price to the public
of which would exceed $10 million, and (ii) such IPO Entity is a registrant
entitled to use Form S-3 or any successor form thereto to register such
securities, then such IPO Entity shall, as expeditiously as possible following
such Request, use its best efforts to register under the Securities Act on Form
S-3 or any successor form thereto, for public sale in accordance with the
intended methods of disposition specified in such Request or any subsequent
requests (including, without limitation, by means of a Shelf Registration) the
Registrable Securities specified in such Request and any subsequent requests;
provided, that if such registration is for an Underwritten Offering, the terms
of Sections 2.1(b) and 2.1(d) shall apply (and any reference to "Demand
Registration" therein shall, for purposes of this Section 2.3, instead be deemed
a reference to "S-3 Registration"). If the sole or lead managing Underwriter (if
any) or the Majority Holders of the Registration shall advise the relevant IPO
Entity in writing that in its opinion additional disclosure not required by Form
S-3 is of material importance to the success of the offering, then such
Registration Statement shall include such additional disclosure. Whenever an IPO
Entity is required by this Section 2.3 to use its best efforts to effect the
registration of Registrable Securities, each of the procedures and requirements
of Sections 2.1(a) and 2.1(e) (including but not limited to the requirements
that such IPO Entity (A) notify all Holders of Registrable Securities from whom
such Request for registration has not been received and provide them with the
opportunity to participate in the offering and (B) use its best efforts to have
such S-3 Registration Statement declared and remain effective for the time
period specified herein) shall apply to such registration (and any reference in
-11-
such Sections 2.1(a) and 2.1(e) to "Demand Registration" shall, for purposes of
this Section 2.3, instead be deemed a reference to "S-3 Registration"). There is
no limitation on the number of S-3 Registrations that an IPO Entity is obligated
to effect; provided that no such registration shall be required in respect of
Registrable Securities that are freely tradable under the Securities Act.
The registration rights granted pursuant to the provisions of this
Section 2.3(a) shall be in addition to the registration rights granted pursuant
to the other provisions of this Section 2.
(b) Shelf Registration. If a request made pursuant to Section 2.1 or
2.3(a) is for a Shelf Registration, the relevant IPO Entity shall use its best
efforts to keep the Shelf Registration continuously effective through the date
on which all of the Registrable Securities covered by such Shelf Registration
may be sold pursuant to Rule 144(k) under the Securities Act (or any successor
provision having similar effect); provided, however, that prior to the
termination of such Shelf Registration, such IPO Entity shall first furnish to
each Holder of Registrable Securities participating in such Shelf Registration
(i) an opinion, in form and substance reasonably satisfactory to the Majority
Holders of the Registration, of counsel for such IPO Entity reasonably
satisfactory to the Majority Holders of the Registration stating that such
Registrable Securities are freely salable pursuant to Rule 144(k) under the
Securities Act (or any successor provision having similar effect) or (ii) a
"No-Action Letter" from the staff of the SEC stating that the SEC would not
recommend enforcement action if the Registrable Securities included in such
Shelf Registration were sold in a public sale other than pursuant to an
effective registration statement.
2.4 Expenses. Each IPO Entity shall pay all of its Registration Expenses
and all discounts and commissions payable to underwriters, selling brokers,
managers or other similar Persons engaged in the distribution of such Holder's
Registrable Securities pursuant to any registration pursuant to this Section 2
in connection with any Demand Registration, Incidental Registration, S-3
Registration or Shelf Registration, whether or not such registration shall
become effective and whether or not all Registrable Securities originally
requested to be included in such registration are withdrawn or otherwise
ultimately not included in such registration, except as otherwise provided with
respect to a Withdrawn Request and a Withdrawn Demand Registration in Section
2.1(b).
2.5 Underwritten Offerings.
(a) Demand Underwritten Offerings. If requested by the sole or lead
managing Underwriter for any Underwritten Offering effected pursuant to a Demand
Registration or an S-3 Registration, the relevant IPO Entity shall enter into a
customary underwriting agreement with the Underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to each Holder of
Registrable Securities participating in such offering and to contain such
representations and warranties by such IPO Entity and such other terms as are
generally prevailing in agreements of that type,
-12-
including, without limitation, indemnification and contribution to the effect
and to the extent provided in Section 5.
(b) Holders of Registrable Securities to be Parties to Underwriting
Agreement. The Holders of Registrable Securities to be distributed by
Underwriters in an Underwritten Offering contemplated by Section 2 shall be
parties to the underwriting agreement among the relevant IPO Entity and such
Underwriters and may, at such Holders' option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
relevant IPO Entity 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 be conditions precedent to the obligations of
such Holders of Registrable Securities; provided, however, that such IPO Entity
shall not be required to make any representations or warranties with respect to
written information specifically provided by a selling Holder for inclusion in
the Registration Statement. No Holder shall be required to make any
representations or warranties to, or agreements with, such IPO Entity or the
Underwriters other than representations, warranties or agreements regarding such
Holder, such Holder's Registrable Securities and such Holder's intended method
of disposition.
(c) Participation in Underwritten Registration. Notwithstanding
anything herein to the contrary, no Person may participate in any underwritten
registration hereunder unless such Person (i) agrees to sell its securities on
the same terms and conditions provided in any underwritten arrangements approved
by the Persons entitled hereunder to approve such arrangements and (ii)
accurately completes and executes in a timely manner all questionnaires, powers
of attorney, indemnities, custody agreements, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.
2.6 Conversions; Exercises. Notwithstanding anything to the contrary
herein, in order for any Registrable Securities that are issuable only upon the
exercise of conversion rights, to be included in any registration pursuant to
Section 2 hereof, the exercise of such conversion rights must be effected no
later than immediately prior to the closing of any sales under the Registration
Statement pursuant to which such Registrable Securities are to be sold.
3. REGISTRATION PROCEDURES.
3.1 Obligations of the IPO Entities. Whenever an IPO Entity is required to
effect the registration of Registrable Securities under the Securities Act
pursuant to Section 2 of this Agreement, such IPO Entity shall, as expeditiously
as possible:
(a) prepare and file with the SEC (promptly, and in any event within
60 days after receipt of a request to register Registrable Securities) the
requisite Registration Statement to effect such registration, which Registration
Statement shall comply as to form in all material respects with the requirements
of the applicable form
-13-
and include all financial statements required by the SEC to be filed therewith,
and such IPO Entity shall use its best efforts to cause such Registration
Statement to become effective (provided, that such IPO Entity may discontinue
any registration of its securities that are not Registrable Securities, and,
under the circumstances specified in Section 2.2, its securities that are
Registrable Securities); provided, however, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, or comparable
statements under securities or blue sky laws of any jurisdiction, such IPO
Entity shall (i) provide Holders' Counsel and any other Inspector with an
adequate and appropriate opportunity to participate in the preparation of such
Registration Statement and each Prospectus included therein (and each amendment
or supplement thereto or comparable statement) to be filed with the SEC, which
documents shall be subject to the review and reasonable comment of Holders'
Counsel, and (ii) not file any such Registration Statement or Prospectus (or
amendment or supplement thereto or comparable statement) with the SEC to which
Holder's Counsel, any selling Holder or any other Inspector shall have
reasonably objected on the grounds that such filing does not comply in all
material respects with the requirements of the Securities Act or of the rules or
regulations thereunder;
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary (i) to keep such Registration Statement effective, and (ii) to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by such Registration Statement, in each
case until such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller(s) thereof
set forth in such Registration Statement; provided, that except with respect to
any Shelf Registration, such period need not extend beyond nine months after the
effective date of the Registration Statement; and provided further, that with
respect to any Shelf Registration, such period need not extend beyond the time
period provided in Section 2.3, and which periods, in any event, shall terminate
when all Registrable Securities covered by such Registration Statement have been
sold (but not before the expiration of the 90 day period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable);
(c) furnish, without charge, to each selling Holder of such
Registrable Securities and each Underwriter, if any, of the securities covered
by such Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits), and the Prospectus included in such Registration Statement (including
each preliminary Prospectus) in conformity with the requirements of the
Securities Act, and other documents, as such selling Holder and Underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such selling Holder (each IPO Entity
hereby consenting to the use in accordance with applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such selling Holder of
-14-
Registrable Securities and the Underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such Registration
Statement or Prospectus);
(d) prior to any public offering of Registrable Securities, use its
best efforts to register or qualify all Registrable Securities and other
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as any selling Holder of Registrable
Securities covered by such Registration Statement or the sole or lead managing
Underwriter, if any, may reasonably request to enable such selling Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such selling Holder and to continue such registration or qualification
in effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals), and
do any and all other acts and things which may be necessary or advisable to
enable any such selling Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such selling Holder;
provided, however, that an IPO Entity shall 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 Section 3.1(d), (ii) subject itself to taxation
in any such jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(e) use its best efforts to obtain all other approvals, consents,
exemptions or authorizations from such governmental agencies or authorities as
may be necessary to enable the selling Holders of such Registrable Securities to
consummate the disposition of such Registrable Securities;
(f) promptly notify Holders' Counsel, each Holder of Registrable
Securities covered by such Registration Statement and the sole or lead managing
Underwriter, if any: (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or
post-effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of any
proceedings for that purpose, (iv) of the receipt by the relevant IPO Entity of
any notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
existence of any fact of which the relevant IPO Entity becomes aware or the
happening of any event which results in (A) the Registration Statement
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statements
therein not misleading, or (B) the Prospectus included in such Registration
Statement containing an untrue statement of a material fact or omitting to state
a material fact required to be stated therein or necessary to make any
statements therein, in the light of the circumstances
-15-
under which they were made, not misleading, (vi) if at any time the
representations and warranties contemplated by Section 2.5(b) cease to be true
and correct in all material respects, and (vii) of the relevant IPO Entity's
reasonable determination that a post-effective amendment to a Registration
Statement would be appropriate or that there exists circumstances not yet
disclosed to the public which make further sales under such Registration
Statement inadvisable pending such disclosure and post-effective amendment; and,
if the notification relates to an event described in any of the clauses (ii)
through (vii) of this Section 3.1(f), such IPO Entity shall promptly prepare a
supplement or post-effective amendment to such Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other
required document so that (1) such Registration Statement shall not contain any
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,
and (2) as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, 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 in the light of the circumstances
under which they were made not misleading (and shall furnish to each such Holder
and each Underwriter, if any, a reasonable number of copies of such Prospectus
so supplemented or amended); and if the notification relates to an event
described in clause (iii) of this Section 3.1(f), the relevant IPO Entity shall
take all reasonable action required to prevent the entry of such stop order or
to remove it if entered;
(g) make available for inspection by any selling Holder of
Registrable Securities, any sole or lead managing Underwriter participating in
any disposition pursuant to such Registration Statement, Holders' Counsel and
any attorney, accountant or other agent retained by any such seller or any
Underwriter (each, an "Inspector" and, collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
relevant IPO Entity and any subsidiaries thereof as may be in existence at such
time (collectively, the "Records") as shall be necessary, in the opinion of such
Holders' and such Underwriters' respective counsel, to enable them to exercise
their due diligence responsibility and to conduct a reasonable investigation
within the meaning of the Securities Act, and cause such IPO Entity's and any of
its subsidiaries' officers, directors and employees, and the independent public
accountants of such IPO Entity, to supply all information reasonably requested
by any such Inspectors in connection with such Registration Statement;
(h) obtain an opinion from the relevant IPO Entity's counsel and a
"cold comfort" letter from such IPO Entity's independent public accountants who
have certified such IPO Entity's financial statements included or incorporated
by reference in such Registration Statement, in each case dated the effective
date of such Registration Statement (and if such registration involves an
Underwritten Offering, dated the date of the closing under the underwriting
agreement), in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be reasonably
satisfactory to the sole or lead managing Underwriter, if any, and to the
-16-
Majority Holders of the Registration, and furnish to each Holder participating
in the offering and to each Underwriter, if any, a copy of such opinion and
letter addressed to such Holder (in the case of the opinion) and Underwriter (in
the case of the opinion and the "cold comfort" letter);
(i) provide a CUSIP number for all Registrable Securities and
provide and cause to be maintained a transfer agent and registrar for all such
Registrable Securities covered by such Registration Statement not later than the
effectiveness of such Registration Statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and any other governmental agency or authority
having jurisdiction over the offering, and make available to its security
holders, as soon as reasonably practicable but no later than 90 days after the
end of any 12-month period, an earnings statement (i) commencing at the end of
any month in which Registrable Securities are sold to Underwriters in an
Underwritten Offering and (ii) commencing with the first day of the relevant IPO
Entity's calendar month next succeeding each sale of Registrable Securities
after the effective date of a Registration Statement, which statement shall
cover such 12-month periods, in a manner which satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) if so requested by the Majority Holders of the Registration, use
its best efforts to cause all such Registrable Securities to be listed (i) on
each national securities exchange on which the relevant IPO Entity's securities
are then listed or (ii) if securities of such IPO Entity are not at the time
listed on any national securities exchange (or if the listing of Registrable
Securities is not permitted under the rules of each national securities exchange
on which such IPO Entity's securities are then listed), on a national securities
exchange reasonably acceptable to the Majority Holders of the Registration;
(l) keep each selling Holder of Registrable Securities advised as to
the initiation and progress of any registration under Section 2 hereunder;
(m) enter into and perform customary agreements (including, if
applicable, an underwriting agreement in customary form) and provide officers'
certificates and other customary closing documents;
(n) cooperate with each selling Holder of Registrable Securities and
each Underwriter participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to be made
with the NASD and make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the Underwriters (taking into account
the needs of the relevant IPO Entity's businesses and the requirements of the
marketing process) in the marketing of Registrable Securities in any
Underwritten Offering;
(o) furnish to each Holder participating in the offering and the
sole or lead managing Underwriter, if any, without charge, at least one
manually-signed copy of
-17-
the Registration Statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those deemed to be incorporated by
reference);
(p) cooperate with the selling Holders of Registrable Securities and
the sole or lead managing Underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the Underwriters or, if not an Underwritten Offering, in
accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities;
(q) if requested by the sole or lead managing Underwriter or any
selling Holder of Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information concerning
such Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling Holder
of Registrable Securities reasonably requests to be included therein and as is
appropriate in the reasonable judgment of the relevant IPO Entity, including,
without limitation, information with respect to the number of shares of the
Registrable Securities being sold to the Underwriters, the purchase price being
paid therefor by such Underwriters and with respect to any other terms of the
Underwritten Offering of the Registrable Securities to be sold in such offering;
make all required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; and supplement or make
amendments to any Registration Statement if requested by the sole or lead
managing Underwriter of such Registrable Securities; and
(r) use its best efforts to take all other steps necessary to
expedite or facilitate the registration and disposition of the Registrable
Securities contemplated hereby.
3.2 Seller Information. An IPO Entity may require each selling Holder of
Registrable Securities as to which any registration is being effected to furnish
to it such information regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of disposition as such IPO Entity
may from time to time reasonably request in writing; provided that such
information shall be used only in connection with such registration.
If any Registration Statement or comparable statement under "blue
sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the relevant IPO Entity, then such Holder shall have the right to
require (i) the insertion therein of language, in form and substance
satisfactory to such Holder and such IPO Entity, to the effect that the holding
by such Holder of such securities is not to be
-18-
construed as a recommendation by such Holder of the investment quality of such
IPO Entity's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of
such IPO Entity, and (ii) in the event that such reference to such Holder by
name or otherwise is not in the judgment of such IPO Entity, as advised by
counsel, required by the Securities Act or any similar federal statute or any
state "blue sky" or securities law then in force, the deletion of the reference
to such Holder.
3.3 Notice to Discontinue. Each Holder of Registrable Securities agrees by
acquisition of such Registrable Securities that, upon receipt of any notice from
an IPO Entity of the happening of any event of the kind described in Section
3.1(f)(ii) through (vii), such Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(f) and, if so
directed by such IPO Entity, such Holder shall deliver to such IPO Entity (at
such IPO Entity's expense) all copies, other than permanent file copies, then in
such Holder's possession of the Prospectus covering such Registrable Securities
which is current at the time of receipt of such notice. If such IPO Entity shall
give any such notice, such IPO Entity shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement
(including, without limitation, the period referred to in Section 3.1(b)) by the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 3.1(f) to and including the date when the Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by and meeting the requirements of Section 3.1(f).
4. INDEMNIFICATION; CONTRIBUTION.
4.1 Indemnification by the IPO Entities. Each IPO Entity agrees to
indemnify and hold harmless, to the fullest extent permitted by law, each Holder
of Registrable Securities, its officers, directors, partners, members,
shareholders, employees, Affiliates and agents (collectively, "Agents") and each
Person who controls such Holder (within the meaning of the Securities Act) and
its Agents with respect to each registration which has been effected pursuant to
this Agreement, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof, and expenses (as incurred or suffered and including, but not
limited to, any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees, disbursements and other charges of legal counsel) in respect
thereof (collectively, "Claims"), insofar as such Claims arise out of or are
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus (including any preliminary, final or
summary prospectus and any amendment or supplement thereto) related to any such
registration or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by an IPO Entity of the Securities Act or any rule
or
-19-
regulation thereunder applicable to an IPO Entity and relating to action or
inaction required of an IPO Entity in connection with any such registration, or
any qualification or compliance incident thereto; provided, however, that an IPO
Entity will not be liable in any such case to the extent that any such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact so made in
reliance upon and in conformity with written information furnished to an IPO
Entity in an instrument duly executed by such Holder specifically stating that
it was expressly for use therein. Each IPO Entity shall also indemnify any
Underwriters of the Registrable Securities, their Agents and each Person who
controls any such Underwriter (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the Holders
of Registrable Securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Person who may be
entitled to indemnification pursuant to this Section 5 and shall survive the
transfer of securities by such Holder or Underwriter.
4.2 Indemnification by Holders. Each Holder, if Registrable Securities
held by it are included in the securities as to which a registration is being
effected, agrees to, severally and not jointly, indemnify and hold harmless, to
the fullest extent permitted by law, the relevant IPO Entity, its directors and
officers, each other Person who participates as an Underwriter in the offering
or sale of such securities of the relevant IPO Entity and its Agents and each
Person who controls such IPO Entity or any such Underwriter (within the meaning
of the Securities Act) and its Agents against any and all Claims, insofar as
such Claims arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (including any preliminary, final or summary prospectus and any
amendment or supplement thereto) related to such registration, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to such IPO Entity in an
instrument duly executed by such Holder specifically stating that it was
expressly for use therein; provided, however, that the aggregate amount which
any such Holder shall be required to pay pursuant to this Section 4.2 shall in
no event be greater than the amount of the net proceeds received by such Holder
upon the sale of the Registrable Securities pursuant to the Registration
Statement giving rise to such Claims less all amounts previously paid by such
Holder with respect to any such Claims. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder or Underwriter.
4.3 Conduct of Indemnification Proceedings. Promptly after receipt by an
indemnified party of notice of any Claim or the commencement of any action or
proceeding involving a Claim under this Section 4, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party
pursuant to Section 5, (i) notify the indemnifying party in writing of the Claim
or the commencement
-20-
of such action or proceeding; provided, that the failure of any indemnified
party to provide such notice shall not relieve the indemnifying party of its
obligations under this Section 4, except to the extent the indemnifying party is
materially and actually prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 4, and (ii) permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, however, that any indemnified party shall have the
right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (A) the indemnifying party has agreed in writing to pay
such fees and expenses, (B) the indemnifying party shall have failed to assume
the defense of such claim and employ counsel reasonably satisfactory to such
indemnified party within 10 days after receiving notice from such indemnified
party that the indemnified party believes it has failed to do so, (C) in the
reasonable judgment of any such indemnified party, based upon advice of counsel,
a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claims (in which case, if the
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such indemnified party) or (D) such indemnified party is a
defendant in an action or proceeding which is also brought against the
indemnifying party and reasonably shall have concluded that there may be one or
more legal defenses available to such indemnified party which are not available
to the indemnifying party. No indemnifying party shall be liable for any
settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. In addition, without the
consent of the indemnified party (which consent shall not be unreasonably
withheld), no indemnifying party shall be permitted to consent to entry of any
judgment with respect to, or to effect the settlement or compromise of any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), unless such settlement,
compromise or judgment (1) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim, (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party, and (3) does not provide for any
action on the part of any party other than the payment of money damages which is
to be paid in full by the indemnifying party.
4.4 Contribution. If the indemnification provided for in Section 4.1 or
4.2 from the indemnifying party for any reason is unavailable to (other than by
reason of exceptions provided therein), or is insufficient to hold harmless, an
indemnified party hereunder in respect of any Claim, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, in connection with the actions which resulted in such Claim, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party
-21-
and indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. If, however, the
foregoing allocation 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 faults
but also the relative benefits of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by a party as a result of any Claim referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in Section 4.3, any legal or other fees, costs or expenses
reasonably incurred by such party in connection with any investigation or
proceeding. Notwithstanding anything in this Section 4.4 to the contrary, no
indemnifying party (other than the relevant IPO Entity) shall be required
pursuant to this Section 4.4 to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such Claims,
less all amounts previously paid by such indemnifying party with respect to such
Claims. 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.
4.5 Other Indemnification. Indemnification similar to that specified in
the preceding Sections 4.1 and 4.2 (with appropriate modifications) shall be
given by each IPO Entity and each selling Holder of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act. The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract.
4.6 Indemnification Payments. The indemnification and contribution
required by this Section 4 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when bills are
received or any expense, loss, damage or liability is incurred.
5. GENERAL
5.1 Adjustments Affecting Registrable Securities. The IPO Entity agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which
-22-
would adversely affect in any material respects the ability of the Holder of any
Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration.
5.2 Registration Rights to Others. Other than as listed on Schedule 4.14
of the Purchase Agreement, the IPO Entity is not a party to any agreement (other
than this Agreement) with respect to its securities granting any registration
rights to any Person. If any IPO Entity shall at any time hereafter provide to
any holder of any securities of an IPO Entity rights with respect to the
registration of such securities under the Securities Act, such rights shall not
be in conflict with or adversely affect any of the rights provided in this
Agreement to the Holders.
5.3 [Intentionally Omitted].
5.4 Amendments and Waivers. The provisions of this Agreement may not be
amended, modified, supplemented or terminated in any material respect, and
waivers or consents to departures from the provisions hereof may not be given,
without the written consent of the Company and the Holders of not less than 50%
of the Registrable Securities then outstanding; provided, however, that no such
amendment, modification, supplement, waiver or consent to departure shall reduce
the aforesaid percentage of Registrable Securities without the written consent
of all of the Holders of Registrable Securities; and provided further, that
nothing herein shall prohibit any amendment, modification, supplement,
termination, waiver or consent to departure the effect of which is limited only
to those Holders who have agreed to such amendment, modification, supplement,
termination, waiver or consent to departure.
5.6 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, telecopier, any
courier guaranteeing overnight delivery or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to the applicable
party at the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties in accordance with the
provisions of this Section:
(i) If to the IPO Entities, to:
ASC Holdings, Inc.
Sunday River ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn.: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If to the Initial Holders, to:
▇▇▇▇▇▇▇▇▇, LLC
-23-
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: 212-758-5305
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. Neporent, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to any subsequent Holder, to the address of such Person set
forth in the records of the Company.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; when receipt
is acknowledged, if telecopied; on the next business day, if timely delivered to
a courier guaranteeing overnight delivery; and five days after being deposited
in the mail, if sent first class or certified mail, return receipt requested,
postage prepaid.
5.7 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, successors
and permitted assigns (including any permitted transferee of Registrable
Securities). Any Holder may assign to any permitted (as determined under the
Purchase Agreement transferee of its Registrable Securities (other than a
transferee that acquires such Registrable Securities in a registered public
offering or pursuant to a sale under Rule 144 of the Securities Act (or any
successor rule)), its rights and obligations under this Agreement; provided,
however, if any permitted transferee shall take and hold Registrable Securities,
such transferee shall promptly notify the Company and, by taking and holding
such Registrable Securities, such permitted transferee shall automatically be
entitled to receive the benefits of and be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement as
if it were a party hereto (and shall, for all purposes, be deemed a Holder under
this Agreement). If the Company shall so request, any heir, successor or
permitted assign (including any permitted transferee) shall agree in writing to
acquire and hold the Registrable Securities subject to all of the terms hereof.
For purposes of this Agreement, "successor" for any entity other than a natural
person shall mean a successor to such entity as a result of such entity's
merger, consolidation, liquidation, dissolution, sale of substantially all of
its assets, or similar transaction. Except as provided above or otherwise
permitted by this Agreement, neither this
-24-
Agreement nor any right, remedy, obligation or liability arising hereunder or by
reason hereof shall be assignable by any party hereto without the consent of the
other parties.
5.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original, but all of which counterparts, taken together, shall constitute
one and the same instrument.
5.9 Descriptive Headings, Etc. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (1) words of any gender shall be deemed to include each
other gender; (2) words using the singular or plural number shall also include
the plural or singular number, respectively; (3) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement unless otherwise specified; (4) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified; (5) "or" is not
exclusive; and (6) provisions apply to successive events and transactions.
5.10 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
5.11 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to the
conflict of laws principles thereof).
5.12 Remedies; Specific Performance. The parties hereto acknowledge that
money damages would not be an adequate remedy at law if any party fails to
perform in any material respect any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to seek to compel
specific performance of the obligations of any other party under this Agreement,
without the posting of any bond, in accordance with the terms and conditions of
this Agreement in any court of the United States or any State thereof having
jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law. Except as otherwise provided by
law, a delay or omission by a party hereto in exercising any right or remedy
accruing upon any such breach shall not
-25-
impair the right or remedy or constitute a waiver of or acquiescence in any such
breach. No remedy shall be exclusive of any other remedy. All available remedies
shall be cumulative. The failure to file a Demand Registration Statement within
__ days of a Request under Section 2.1 or 2.3 shall constitute, in the absence
of an injunction having been imposed or a Withdrawn Request, a breach thereof
entitling the Holders to remedies hereunder.
5.13 Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and 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. There are no restrictions, promises or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the Company and the
other parties to this Agreement with respect to such subject matter.
5.14 Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company (on behalf of the IPO Entities), be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
5.16 Consent to Jurisdiction. Each party to this Agreement hereby
irrevocably and unconditionally agrees that any legal action, suit or proceeding
arising out of or relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in any federal court of the Southern District
of New York or any state court located in New York County, State of New York,
and hereby irrevocably and unconditionally expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and hereby
irrevocably and unconditionally waives any claim (by way of motion, as a defense
or otherwise) of improper venue, that it is not subject personally to the
jurisdiction of such court, that such courts are an inconvenient forum or that
this Agreement or the subject matter may not be enforced in or by such court.
Each party hereby irrevocably and unconditionally consents to the service of
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth or provided for in Section 5.5 of this
Agreement, such service to become effective 10 days after such mailing. Nothing
herein contained shall be deemed to affect the right of any party to serve
process in any manner permitted by law or commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction to enforce
judgments obtained in any action, suit or proceeding brought pursuant to this
Section.
-26-
5.15 Further Assurances. Each party hereto shall do and perform or cause
to be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
5.17 No Inconsistent Agreements. Each IPO Entity will not hereafter enter
into any agreement which is inconsistent with the rights granted to the Holders
in this Agreement.
5.18 Construction. Each of the parties hereto acknowledges that it has had
the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement with its legal counsel and that this
Agreement shall be construed as if jointly drafted by the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
ASC HOLDINGS, INC. ▇▇▇▇▇▇▇▇▇ L.L.C.:
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------- -----------------
Its Senior Vice President
and Chief Administrative
Officer
-27-
TABLE OF CONTENTS
-----------------
Page
----
1. DEFINITIONS....................................................... 1
2. REGISTRATION UNDER THE SECURITIES ACT............................. 6
2.1 DEMAND REGISTRATION......................................... 6
2.2 INCIDENTAL REGISTRATION..................................... 9
2.3 S-3 REGISTRATION; SHELF REGISTRATION........................ 11
2.4 EXPENSES.................................................... 12
2.5 UNDERWRITTEN OFFERINGS...................................... 12
2.6 CONVERSIONS; EXERCISES...................................... 13
3. REGISTRATION PROCEDURES........................................... 13
3.1 OBLIGATIONS OF THE IPO ENTITIES............................. 13
3.2 SELLER INFORMATION.......................................... 18
3.3 NOTICE TO DISCONTINUE....................................... 19
4. INDEMNIFICATION; CONTRIBUTION..................................... 19
4.1 INDEMNIFICATION BY THE IPO ENTITIES......................... 19
4.2 INDEMNIFICATION BY HOLDERS.................................. 20
4.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS...................... 20
4.4 CONTRIBUTION................................................ 21
4.5 OTHER INDEMNIFICATION....................................... 22
4.6 INDEMNIFICATION PAYMENTS.................................... 22
5. GENERAL........................................................... 22
5.1 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES................ 22
5.2 REGISTRATION RIGHTS TO OTHERS............................... 23
5.3 [INTENTIONALLY OMITTED]..................................... 23
5.4 AMENDMENTS AND WAIVERS...................................... 23
5.6 NOTICES..................................................... 23
5.7 SUCCESSORS AND ASSIGNS...................................... 24
5.8 COUNTERPARTS................................................ 25
5.9 DESCRIPTIVE HEADINGS, ETC................................... 25
5.10 SEVERABILITY................................................ 25
5.11 GOVERNING LAW............................................... 25
5.12 REMEDIES; SPECIFIC PERFORMANCE.............................. 25
5.13 ENTIRE AGREEMENT............................................ 26
5.14 NOMINEES FOR BENEFICIAL OWNERS.............................. 26
5.15 CONSENT TO JURISDICTION..................................... 26
5.15 FURTHER ASSURANCES.......................................... 27
5.17 NO INCONSISTENT AGREEMENTS.................................. 27
5.18 CONSTRUCTION................................................ 27
-i-